With nearly a decade covering personal finance, Rebecca Safier simplifies loans and other complex financial topics to help people manage their money with confidence. Her work has been featured in Forbes Advisor, Buy Side from WSJ, U.S. News & Wor.
Rebecca Safier Personal Finance WriterWith nearly a decade covering personal finance, Rebecca Safier simplifies loans and other complex financial topics to help people manage their money with confidence. Her work has been featured in Forbes Advisor, Buy Side from WSJ, U.S. News & Wor.
Written By Rebecca Safier Personal Finance WriterWith nearly a decade covering personal finance, Rebecca Safier simplifies loans and other complex financial topics to help people manage their money with confidence. Her work has been featured in Forbes Advisor, Buy Side from WSJ, U.S. News & Wor.
Rebecca Safier Personal Finance WriterWith nearly a decade covering personal finance, Rebecca Safier simplifies loans and other complex financial topics to help people manage their money with confidence. Her work has been featured in Forbes Advisor, Buy Side from WSJ, U.S. News & Wor.
Personal Finance Writer Chris Jennings Loans & Mortgages EditorChris Jennings is a writer and editor with more than seven years of experience in the personal finance and mortgage space. He enjoys simplifying complex mortgage topics for first-time homebuyers and homeowners alike. His work has been featured in a n.
Chris Jennings Loans & Mortgages EditorChris Jennings is a writer and editor with more than seven years of experience in the personal finance and mortgage space. He enjoys simplifying complex mortgage topics for first-time homebuyers and homeowners alike. His work has been featured in a n.
Chris Jennings Loans & Mortgages EditorChris Jennings is a writer and editor with more than seven years of experience in the personal finance and mortgage space. He enjoys simplifying complex mortgage topics for first-time homebuyers and homeowners alike. His work has been featured in a n.
Chris Jennings Loans & Mortgages EditorChris Jennings is a writer and editor with more than seven years of experience in the personal finance and mortgage space. He enjoys simplifying complex mortgage topics for first-time homebuyers and homeowners alike. His work has been featured in a n.
| Loans & Mortgages Editor
Published: Aug 3, 2023, 2:23pm
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
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If you’re not able to manage the purchase or sale of a property in person—or prefer to outsource this complicated task to someone else—you might draw up a power of attorney agreement.
A power of attorney in real estate is a legal document that authorizes another individual to manage, sell or purchase property on your behalf. This “authorized agent,” also sometimes known as an “attorney-in-fact,” can step in to manage your property according to the permissions granted in the power of attorney.
A power of attorney is a legal document that allows one or more people to act on your behalf when managing assets, selling a home or making other decisions. The agreement will spell out what decisions the authorized agent is and is not allowed to make on your behalf.
For instance, the power of attorney may authorize someone to sell your home, but it may not permit that person to manage other financial assets. On the flip side, a power of attorney may be more general and allow an authorized agent to handle all your financial dealings.
This authorization to act on your behalf could be temporary or permanent. Some individuals enact this agreement right away, whereas others create one so that they’re covered in the event of a medical emergency or disability.
A power of attorney is accepted in all 50 states, but its specific rules vary by location. To finalize this document, both the asset owner—also known as the principal—and the authorized agent must sign it before a notary and one or two witnesses.
A power of attorney in real estate applies specifically to property management. It allows a trusted person to manage, sell or purchase property on behalf of the asset owner (principal). This authorized agent might sign paperwork, handle title documents, sift through offers or take care of all the other moving parts that go into buying and selling a home.
Someone might use a power of attorney if they can’t manage their property or attend the closing of a home in person. For example, the principal might be overseas, so they need someone else to deal with their property sale while they’re out of the country. They might temporarily authorize a power of attorney in real estate if they can’t be present at closing for another reason, such as a work commitment or medical issue.
Along similar lines, the principal could be in the hospital, a nursing home or deployed on active military duty and unable to deal with real estate transactions on their own. With a power of attorney, the principal doesn’t need to attend to these matters in person—the authorized agent can act as their representative in authorized transactions.
The amount of time a power of attorney lasts varies by state, but you may be able to set up indefinite authorization. In fact, many states allow a “durable” power of attorney that remains active until the principal revokes permission or passes away.
That said, it’s possible to specify a termination date within the contract if you want it to expire on a certain date. It’s also worth checking in with your power of attorney contract if you move to a new state. While moving probably won’t invalidate the document, it’s still a good idea to update it with your most recent information.
Plus, it’s a good practice to check in with your power of attorney—and the lawyer who drafted it—every once in a while to see whether it requires any updates or revisions. If it’s no longer meeting your needs, you can choose to revoke the agreement or assign a new agent to act on your behalf.
A power of attorney is not the same as an executor of estate. While a power of attorney can act on your behalf for any number of responsibilities if you’re out of the country or medically impaired, an executor of estate is someone who deals exclusively with a deceased individual’s financial affairs.
An executor of estate is typically named in the deceased’s will, and it may be a relative, friend, attorney or other trusted individual. If there was no will, a probate court judge will name someone to be executor of estate, often a close relative. That person can choose whether or not to accept this responsibility.
An executor of estate has to carry out a number of administrative responsibilities, including distributing assets, paying off creditors and filing tax returns. Someone who becomes an authorized agent through a power of attorney, on the other hand, may have specific responsibilities related to the management of assets or real estate.
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