Any property transaction takes place with the consent and knowledge of legal buyers and sellers. However, there are circumstances in which the legal right to make the transaction has to be given to someone else.
With the help of a power of attorney, the legal right to buy or sell property can be given to desired individuals and corporations. If someone else holds a power of attorney, he or she has the authority to act on behalf of the grantor. Thus POA enables the authorized person to execute on behalf.
Understanding the Power of Attorney
It is a legal arrangement with the potential to provide its executor with the legal power to make decisions. While the states recognize POA, but most have them different rules to govern it. The power of attorney form Connecticut may be different from other states and is available at Forms. Legal.
A power of attorney can be limited to a specific activity or be general in the application. It can be temporary or a permanent one. It can be durable or non-durable.
Invoking a power of attorney. To use a power of attorney, the agent must present the document showing that the POA is given to him or her or them. The real estate agents and financing institutions have to mention it in the document before they can accept the right of the agent to undertake the transaction.
The agent has to act in the best interest of the principal with full honesty. For instance, he should sell the property to himself for lower market value unless it is in the best interest of the principal.
The authority of the agent may be challenged in the court by other interested parties who feel that the agent is not working in the best interest of the principal.
Types of Power of Attorney
A durable POA works well even if the principal is incapacitated. However, a non-durable power of attorney terminates when the principal becomes incapacitated.
The principal can only grant a power of attorney to anyone while he is in good mental health and is not acting under any kind of pressure.
A power of attorney begins on the date specified on the POA contract. It can be revoked in writing or on a date mentioned in the document. There may be certain circumstances that may revoke the POA automatically. It can be revoked by the principal of a sound mind. Some instances may be divorce in case the other spouse is an agent or the death of the agent or death or incapacitation of the principal.
A POA can be general or it may be limited to a particular transaction. A limited power of attorney is also known as a special power of attorney. The contract is drafted to include only specific actions permitted to the agent by the principal.
For instance, a power of attorney may be limited to a specific real estate transaction or to access a particular bank account.
A general power of authority grants powers to act in all ways for the principal. It gives the authority to sell a property to access the bank accounts. However, a general power of attorney may not be acceptable by some institutions. They need a specific power of attorney to complete the action.
Why Is It Given?
Sometimes a power of attorney is granted for convenience. For instance, if you are selling or buying property, but are not present physically (traveling or not available to sign), you can grant power of attorney to someone to act in place of the grantor for this specific transaction. Another reason to give power of attorney is to plan for an uncertain future.
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