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July 4, 2017

The “Switching” Durable Power of Attorney

Filed under: Ken Edelstein — Tags: , — admin @ 9:23 am

Durable – this means the Agent “Might” have authority at any given moment. Unlike the regular Power of Attorney, the “agency” relationship (not the specific powers) between the Principal and Agent (can) switch on and off. The status can be elusive, as it is/might be based on incapacitation of the Principal to manage their own affairs. And, specifically how the Power of Attorney is worded. It becomes even more interesting when the variations of the Durable are considered. Note: these variations are usually not in the title; the devil is in the details. Also note: I have never seen the word Switching used in the title of a real POA; that’s my term.

Even When I’m Sick – Durable in this variation continues the agency relationship when the person becomes incapacitated. Unlike a regular POA, this maintains agency even when the Principal is unable to revoke the Agent authority. This is the format that I have most commonly seen. It generally takes effect upon notarization of both the Principal and the Agent. It is “durable” in the sense that it maintains agency, thru incapacitation until revoked.

Not Now, Maybe Later – In this variation the agency relationship does not exist when the Principal signs the document. The objective is to establish agency when the Principal is no longer a valid subject for notarization – incapacitated. Clearly at the moment of notarization; the Principal cannot be incapacitated. It may look like a “ready to use POA”, but Agent has no authority while the Principal is able to manage their own affairs, IF it is written that way. Contrast with the regular POA which establishes the agency relationship (Agent has authority) – immediately.

The Notary Point of View – the internal wording of the Power of Attorney, Durable or not – does not concern the notary. What it says, or does not say; is of no concern to me. The usual criterion for us to notarize a signature applies, regardless of the wording. Perhaps a bit more so, as POA documents are potential vehicles for mischief. Care should be taken with IDs and that there is no intimidation.
The Acceptors Point of View – So many nooks and crannies, it could be difficult to establish a current agency relationship, and Agent’s current authority. Perhaps that is why many banks insist upon only accepting their own POA document. Usually? There is no usually, the acceptor will probably need an Attorney and some research to determine current validity. It may be titled “Durable Power of Attorney” but if the fine print says it’s only valid when (and that when can be a moving (off and on) target) the Principal is incapacitated – is it valid when presented?

A POA form may look “routine” – but the notary steps over the cliff if they “explain” it. I am not an attorney, nor can I relate how this document applies to your situation. Or, in the very unlikely situation can I advise the acceptor as to acceptance. I can only say that the signatures were notarized following all applicable laws. That’s it.

Due to the potential for fraud and litigation, many are the local (to me) notaries who decline to process any Power of Attorney documents. We are not required to read or understand the contents of documents we notarize. Apply the basics, to the letter – if it feels “bad” run away.

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November 14, 2011

Power of Attorney Signings

Power of Attorney Notary Signings
 
It is common for notaries to get a job notarizing a signature of a grantor on a power of attorney document.  It is also common for a signer who is the attorney in fact to sign documents in their official capacity as an attorney in fact.  The problems is that most notaries haven’t a clue how to handle this type of common, yet critical situation. 
 
Types of powers of attorneys
First of all, as a notary public, you are not required to understand the contents of the document.  For an acknowledged signature, the signer should be named in the document and should sign it.  Other than that, you just need to be sure the signer understands the document, and you shouldn’t have any indication that the document is fraudulent (how would you know anyway?).  Their are banking powers of attorney, durable powers of attorney, health care powers of attorney, and living trusts which are a sort of power of attorney. There are other types too, but these are the most common ones.
 
What does a notary need to know about powers of attorney?
You need to know who a grantor and grantee is.  You need to know who an attorney in fact is (= the grantee).  You need to know how the attorney in fact signs a document.  You need to know that California notaries must take journal thumbprints when notarizing signatures on powers of attorney.
 
 
Is the form I am using acceptable?
Notaries may NOT recommend particular power of attorney forms, nor should they assist in filling them out.  The notary should look for blanks, and refuse to notarize if there are any blanks in the document.  It is not a crime for a notary to have blank standardized power of attorney forms in their briefcase, so long as they make it clear that they are not giving legal advice and not recommending the use of those forms.  You might tell the client that they should check with the document custodian (whomever they are submitting the documents to), to see what type of paperwork they will accept.  What is legal, and what is acceptable to the recipient are often two different things.
 
Banking power of attorney
Most banks have their own power of attorney form which is on card stock and leaves about half an inch to squeeze your two and a half inch wide notary seal (how educated of them!).  If asked to notarize a banking power of attorney, just do what the client asks within the limits of the law, but for your knowledge, you should be aware that the bank may not accept a power of attorney that they didn’t draft and that the client might be advised to check with the bank before doing any business with a notary public. 
 
How does an attorney in fact sign?
The person who has been granted special powers from a power of attorney is the grantee or attorney in fact.  They can sign in two ways that I am aware of.  If the grantor is John Doe, and the attorney in fact is Sally Smith, here is how Sally signs on behalf of John.
(1)  John Doe, by Sally Smith, his attorney in fact
(2) Sally Smith, as attorney in fact for John Doe
 
Power of attorney documents at a loan signing
Whether or not the loan will be accepted is hard to say.  However, many lenders will require a copy of the power of attorney to accompany the documents. 
 
Acknowledgment Forms
Some acknowledgment forms allow the notary to identify the capacity of the signer.  One of the standard check boxes on an acknowledgment certificate form is for attorney in fact, and other corporate offices are sometimes mentioned as well.

You might also like:

Index of posts about Power of Attorney
http://blog.123notary.com/?p=20255

How do you get a Power of Attorney Document?
http://blog.123notary.com/?p=20785

Notarizing Documents for the Elderly
http://blog.123notary.com/?p=3334

Notarized Affidavits Information
http://blog.123notary.com/?p=1963

Bank of America Power of Attorney Form
http://blog.123notary.com/?p=21327

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