DEFINITION of Power of Attorney of Property
Power of attorney of property is a legal document transferring the legal right to the attorney or agent to manage and access the principal's property in the event the principal is unable to do so themselves.
BREAKING DOWN Power of Attorney of Property
The power of attorney of property usually includes all assets held by the principal, such as real estate, bank accounts and stocks. The terms of the contract, including what can and cannot be managed, are determined at the time the contract is established.
This form for power of attorney can grant the agent extensive capacity to oversee property and real assets, including management of the principal’s business, for the specified time frame. A general power of attorney of property could encompass the entirety of the principal’s holdings of value. The agent would have broad decision-making powers over effectively all the assets. Limited terms for power of attorney of property can also be established, narrowing the scope to a specific transaction the principal wants the agent to handle on their behalf. Two witnesses are required at the signing of a power of attorney of property in order for it to be valid.
How Power of Attorney of Property Is Applied in Practice
Power of attorney is frequently associated with situations where the principal is physically incapable of actively making decisions regarding their assets. This can include being hospitalized or under other forms of medical care that constrain the principal’s ability to take action for themselves. If an individual is rendered unconscious at a time when assets must be managed, power of attorney can be applied by the agent to take action in the interim. Continuing power of attorney of property is often granted when the principal has reached a stage when they no longer possess the long-term capacity to make and enact their own decisions.
There are other instances when power of attorney of property might be conferred. Such authority could be granted to allow the agent to oversee the handling of specific assets while the principal is unavailable. For example, the principal might be out of the country when a transaction is due to close on some real property they own. That could be for the sale of real estate or even a business.
In order to grant power of attorney of property, the principal must be at least 18 years-old, be in full control of their mental faculties, understand of the value of assets being put into the agent’s care, and be aware of the authority being granted to the agent.
Bestowing such control to another individual comes with an expectation that the agent will act according to the instructions and best interests of the principal. There is no guarantee beyond the terms stated in the document to ensure that those wishes will be honored.