Requirements for Establishing a Durable Power of Attorney

Planning for a time when you may be unable to manage your finances or other important affairs can be uncomfortable. However, deciding in advance who will have authority to act for you can prevent uncertainty if an illness, injury, or other circumstance leaves you unable to handle those matters yourself.

A durable power of attorney allows you to appoint another person, known as an agent, to act on your behalf. Depending on the authority you grant, your agent may be able to manage bank accounts, pay bills, handle real estate transactions, address tax matters, or perform other financial and legal tasks.

At Hefferon Law, PLLC, we help you prepare estate planning documents that reflect your circumstances and the authority you want to give your chosen agent. From our office in Charlotte, NC, we serve clients throughout Mecklenburg County, Union County, Cabarrus County, and surrounding communities. Contact us today to discuss how a durable power of attorney may fit into your estate plan.

Recognizing the Importance of a Durable Document

A power of attorney is a legal document through which you authorize another person to act on your behalf. The authority can be broad or limited depending on how the document is written.

North Carolina law makes an important distinction regarding durability. Under the North Carolina Uniform Power of Attorney Act, a power of attorney created under the statute is durable unless the document expressly states that it terminates when the principal becomes incapacitated. In other words, North Carolina does not require you to add special language to make an otherwise valid power of attorney durable.

Durability matters because it allows your agent's authority to continue if you later become incapacitated. Without an effective durable power of attorney or another appropriate arrangement, court involvement may become necessary to determine who has authority to manage your affairs.

A power of attorney is generally effective upon execution unless the document states that it will become effective on a future date or upon a specified event, such as incapacity. North Carolina law also provides procedures for determining incapacity when a power of attorney is designed to become effective upon that event.

Essential Legal Requirements for Creation

North Carolina law establishes requirements for executing a valid power of attorney. Understanding those requirements can help you create a document that accurately reflects who you want to act on your behalf and what that person may do.

Several considerations are particularly important when establishing a power of attorney in North Carolina:

• Proper execution: The power of attorney must be signed by you or, in your conscious presence, by another individual whom you direct to sign your name.

• Acknowledgment: Your signature must be acknowledged. A signature is presumed genuine when it is acknowledged before a notary public or another person legally authorized to take acknowledgments.

• Designation of an agent: The document identifies the person you authorize to act on your behalf. North Carolina law also allows you to designate co-agents and successor agents.

• Scope of authority: The document should address the powers you intend your agent to have. North Carolina law recognizes general authority over subjects including real property, personal property, financial accounts, businesses, insurance, retirement plans, taxes, and other matters. Some powers require an express grant of specific authority.

The original draft incorrectly states that notarization is what makes a power of attorney “officially durable.” Durability and execution are separate issues. Acknowledgment is part of the statutory execution requirements, while durability is governed by North Carolina's default rule unless the document expressly provides for termination upon incapacity.

Careful drafting also matters because the authority you give an agent can be substantial. A document should reflect what you actually want your agent to be able to do rather than simply granting authority without considering its practical consequences.

Selecting the Right Agent for Your Affairs

Choosing an agent is one of the most important decisions involved in creating a durable power of attorney. Depending on the authority granted, your agent may manage financial accounts, pay expenses, deal with property, communicate with financial institutions, or handle other significant transactions for you.

You do not have to select a particular relative simply because of that person's relationship to you. Consider whether the person you choose is trustworthy, financially responsible, willing to serve, and capable of carrying out your instructions.

North Carolina law imposes duties on an agent who accepts the appointment. Among other requirements, an agent exercising authority must act in accordance with your reasonable expectations when they are known, otherwise act in your best interest, act in good faith, and remain within the authority granted by the document.

You can also name one or more successor agents. A successor can step in if the original agent resigns, dies, becomes incapacitated, is no longer qualified to serve, or declines to serve. Including a successor may help prevent a gap in authority if your first choice becomes unavailable.

Finding Peace of Mind Through a Power of Attorney

A durable power of attorney gives you an opportunity to decide in advance who can manage important affairs if you become unable to do so yourself. It can also allow you to define the scope of that person's authority rather than leaving those decisions until a crisis occurs.

Because North Carolina law provides specific rules governing execution, durability, effectiveness, agent authority, and termination, your document should be prepared with your individual needs in mind. A power of attorney dealing with finances is also distinct from a health care power of attorney, which is governed separately under North Carolina law.

At Hefferon Law, PLLC, we help you consider whom to appoint, what authority to grant, and how a durable power of attorney fits with the rest of your estate plan. We serve clients in Charlotte, Mecklenburg County, Union County, Cabarrus County, and surrounding communities. Contact our North Carolina estate planning attorney today to schedule a consultation.