North Carolina General Statutes 32A-1 through 32A-14 create the framework for powers of attorney. The statute lays out what is required to create and execute a power of attorney, and what powers such an instrument conveys to the person named. The person to whom power is granted under a power of attorney is called the “attorney in fact.” The person granting the power is called the “principal.”
Powers of attorney are generally effective for the life of the principal, and then only during the period when the principal is competent. This general statement may be adjusted by the use of different language. It is possible to create a power of attorney that is only effective following a determination that the principal is incapacitated, or one that is effective for the entirety of the principal’s life, regardless of capacity. A power of attorney that is effective regardless of the principal’s capacity is considered “durable.” A power of attorney that is only effective upon the principal’s incapacity is called “springing.” In order for a durable power of attorney to be effective after the principal’s incompetence, it must be recorded with the Register of Deeds in the county where the principal is a resident. The power of attorney need not be recorded before the principal’s incompetence; post-competence registration is just as valid.
North Carolina General Statute 32A-2 sets out the sorts of powers that are conveyed by the execution of a power of attorney.
The need for successor attorneys-in-fact can be handled in one of two ways: by either granting the named attorney-in-fact the authority to name a successor, or by naming the successor in the document itself. The easiest way is to name the successor attorney in the document. If a successor is not named expressly in the document, and the named attorney-in-fact does not name a successor, the power lapses, leaving no one to act for the principal, and likely creating the need for a guardianship proceeding.
- A power of attorney grants the attorney-in-fact authority that extends beyond the life of the agent. This is incorrect. The authority granted to the attorney-in-fact terminates with the death of the principal.
- The attorney-in-fact has unlimited authority. This is incorrect. The powers and authority of the attorney-in-fact are restricted by the power of attorney itself, along with the duties and responsibilities imposed by the North Carolina General Statutes.
- My attorney-in-fact can deal with my medical issues/make health care decisions for me. The answer to this is “it depends,” but more likely than not, an attorney-in-fact acting under a durable power of attorney is unable to make health care decisions, unless the document contains specific provisions granting such authority.
- The Power of Attorney fails to grant some necessary authority, its need only becoming obvious later. Consultation with an attorney can help avoid this.
- The Power of Attorney is only effective while the principal is competent. As is often the case, the need for someone to act in favor of the principal arises only when the principal is incompetent and unable to act for themselves.
Advantages of a Well-Drafted Power of Attorney:
- Allows the attorney-in-fact to help the principal get assets out of their name in order to qualify for Medicaid.
- Gives the attorney-in-fact the authority to deal with all issues that arise.
- Avoids the need for a guardianship proceeding.