It’s a reality of life that there may come a time when your spouse, partner or loved one either becomes incapacitated or unable to act for themselves. If the individual has financial matters involving real estate, it’s very important to have a Power of Attorney filed in order to protect their interests. Below are the different types of POA’s available for real estate transactions:
Special Power of Attorney for a Sale – Good for six months or less in most cases, this POA is used for selling property. A legal description of it, notarized and recorded*, is also needed to finalize the transaction. It’s also good for only one specific piece of property. Another sale would need another POA.
Special Power of Attorney for a Purchase/Encumber – Covers a property purchase. With lender approval, you can also use this POA to financially encumber property with a security instrument. This POA is also only good for six months or less, and a legal description of the property must be notarized and recorded*. In addition, this POA only covers one specific property purchase. If the individual wants to do another buy, they’d need to do another POA.
Durable Power of Attorney – This is the most common POA, where an individual may give power to cover a wide array of matters from health care, to buying or selling, to managing business or financial matters. A POA can even be set up to file a lawsuit. The length of a POA can be set for a specific or indefinite period, but can also be cancelled at any time. It can also take effect immediately or in the future. There is language one can put in to cover everything but for real estate transactions, the POA needs to specifically include the right to sell and/or purchase property, make property gifts, or change community property agreements. Filing* this document also ensures that real estate transactions are valid for title insurance purposes.
Other Power of Attorney Information – The POA ends in the event of the individual’s death. And, a POA does not substitute for a will by either creating or altering one.
How to Create a Power of Attorney – A Durable POA is typically set up and filed by an attorney. A Special POA can either be done by an attorney, or by using approved generic forms which you can download from the Washington State Bar Association forms website. If you go this route, don’t forget to get it recorded!
For More Information – The University of Washington’s Marion Gould Gallagher Law Library website is an excellent source on all sorts of legal matters. Their Power of Attorney link also includes information on Guardianships. Legal advice via email and phone is also available, just check out the links on top of their webpage.
*For King County residents, ”Recorded” and “Filing” refers to registering POA’s with the King County Recorder’s office. POA’s are considered confidential and in King County, are not accessible to the public.