(919) 883-4861

short form power of attorneyIn North Carolina, the legislature has prepared a statutory short form power of attorney to help and guide attorneys and citizens who need a durable power of attorney. (Which is pretty much everyone).

However, just because it is out there, doesn’t mean you should use it.

Here is a link to the statutory short form (Updated as of January 1, 2018). (Or scroll to the bottom of this page, I’ve copied and pasted the form into this post).

Click here for more information about the new statutory short form power of attorney that went into effect in North Carolina on January 1, 2018.

But if the Law Provides this Form, isn’t that good enough?

No, not necessarily.

Here is a story that illustrates what I’m talking about.

Yesterday I was meeting with a friend of mine to go over Medicaid planning for his Grandmother.

Thirty years ago my friend’s Grandmother executed a short form power of attorney, appointing my friend’s father as the attorney-in-fact to represent him.

Fast forward to today, my friend’s grandmother is in her 90’s and has Alzheimer and Dementia.

They now need to do some Medicaid planning for her but are limited in what they can do.

I know what you are thinking – they have a power of attorney, so what’s the problem?

The problem is that the short form power of attorney they used thirty years ago does not confer on my friend’s father the power to gift property. It says that he can engage in “real property transactions”, but the North Carolina Supreme Court has said this language is not sufficient to gift real estate.

And that’s a big problem because the Grandmother now has Alzheimer’s and Dementia and very well may lack the mental competence to sign a new power of attorney form.

What to Do if the Short Form Power of Attorney is Not Sufficient for Your Planning Needs?

This is an all-too-common scenario. And if the short form power of attorney you or your loved one used many years ago is no longer valid for your purposes today, than you have two options.

The first option and the least expensive option is to hire a lawyer to draft a new power of attorney for that person to sign. However, they must be mentally competent to sign the power of attorney. That means they understand what they are signing and the powers it confers.

That’s a tall order for someone who has dementia or Alzheimer’s. Although they may have momentary periods of lucidity, those moments may be few and far between. You will need an attorney to question them and make sure they are competent.

If they are no longer competent, then the only other option is to petition the court to have someone appointed as a guardian. This is a costly legal proceeding that takes time. And for someone who is applying for Medicaid benefits, every month that goes by is another month without those important and valuable benefits.

Not only that, but once a guardian is appointed, then annual accountings must be prepared and reported to the court for as long as the guardian is needed.

There is a Better Option

Rather than rely on North Carolina’s Short Form Power of Attorney, we work with our clients to customize a long form power of attorney that covers every possible contingency. The last thing we want is for family members to be worried about guardianship proceedings or rushing to get a new power of attorney drafted while someone is in a momentary state of lucidity.

If you or a family member are in a situation where you may need a power of attorney, please reach out to our office at (919) 883-4861 or fill out our online contact form. We would be happy to schedule a no-cost planning session to go over your specific estate planning needs.

North Carolina Statutory Short Form Power of Attorney

§ 32C-3-301.  Statutory form power of attorney.

As a nonexclusive method to grant a power of attorney, a document substantially in the following form may be used to create a statutory form power of attorney that has the meaning and effect prescribed by this Chapter:

“NORTH CAROLINA

STATUTORY SHORT FORM POWER OF ATTORNEY

NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD AND SWEEPING. THEY ARE DEFINED IN CHAPTER 32C OF THE NORTH CAROLINA GENERAL STATUTES, WHICH EXPRESSLY PERMITS THE USE OF ANY OTHER OR DIFFERENT FORM OF POWER OF ATTORNEY DESIRED BY THE PARTIES CONCERNED.

IMPORTANT INFORMATION

This power of attorney authorizes another person (your agent) to make decisions concerning your property for you (the principal). Your agent will be able to make decisions and act with respect to your property (including your money) whether or not you are able to act for yourself. The meaning of authority over subjects listed on this form is explained in the North Carolina Uniform Power of Attorney Act.

This power of attorney does not authorize the agent to make health care decisions for you.

You should select someone you trust to serve as your agent. Unless you specify otherwise, generally the agent’s authority will continue until you die or revoke the power of attorney or the agent resigns or is unable to act for you.

Your agent is entitled to reasonable compensation unless you state otherwise in the Additional Provisions and Exclusions.

This form provides for designation of one agent, successor agent, and second successor agent. If you wish to name more than one agent, successor agent, and second successor agent, you may name a coagent, successor coagent, or second successor coagent in the Additional Provisions and Exclusions. Coagents, successor coagents, or second successor coagents are not required to act together unless you include that requirement in the Additional Provisions and Exclusions.

If your agent is unable or unwilling to act for you, your power of attorney will end unless you have named a successor agent. You may also name a second successor agent.

This power of attorney becomes effective immediately.

If you have questions about the power of attorney or the authority you are granting to your agent, you should seek legal advice before signing this form.

DESIGNATION OF AGENT

I, ___________________________________, name the following person as my agent:

Name of Agent:    _____________________________ (Name of Principal).

DESIGNATION OF SUCCESSOR AGENT(S)

(OPTIONAL)

If my agent is unable or unwilling to act for me, I name as my successor agent:

Name of Successor Agent:

If my successor agent is unable or unwilling to act for me, I name as my second successor agent:

Name of Second Successor Agent:

INITIAL below if you want to give an agent the power to name a successor agent

(_____) I give to my acting agent the full power to appoint another to act as my agent, and full power to revoke such appointment, if no agent named by me above is willing or able to act.

GRANT OF GENERAL AUTHORITY

I grant my agent and any successor agent general authority to act for me with respect to the following subjects as defined in the North Carolina Uniform Power of Attorney Act, Chapter 32C of the General Statutes:

(INITIAL each subject you want to include in the agent’s general authority. If you wish to grant general authority over all of the subjects you may initial “All Preceding Subjects” instead of initialing each subject.)

(______) Real Property

(______) Tangible Personal Property

(______) Stocks and Bonds

(______) Commodities and Options

(______) Banks and Other Financial Institutions

(______) Operation of Entity or Business

(______) Insurance and Annuities

(______) Estates, Trusts, and Other Beneficial Interests

(______) Claims and Litigation

(______) Personal and Family Maintenance

(______) Benefits from Governmental Programs or Civil or Military Service

(______) Retirement Plans

(______) Taxes

(______) All Preceding Subjects

GRANT OF SPECIFIC AUTHORITY (OPTIONAL)

My agent MAY NOT do any of the following specific acts for me UNLESS I have INITIALED the specific authority listed below:

(CAUTION: Granting any of the following will give your agent the authority to take actions that could significantly reduce your property or change how your property is distributed at your death. INITIAL ONLY the specific authority you WANT to give your agent.)

(______) Make a gift, subject to the limitations provided in G.S. 32C-2-217

(______) Create or change rights of survivorship

(______) Create or change a beneficiary designation

(______) Authorize another person to exercise the authority granted under this power of attorney

(______) Waive my right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan

(______) Exercise fiduciary powers that I have authority to delegate

(______) Disclaim or refuse an interest in property, including a power of appointment

(______) Access the content of electronic communications.

EXERCISE OF SPECIFIC AUTHORITY IN FAVOR OF AGENT (OPTIONAL)

(______) UNLESS INITIALED, an agent MAY NOT exercise any of the grants of specific authority initialed above in favor of the agent or an individual to whom the agent owes a legal obligation of support

ADDITIONAL PROVISIONS AND EXCLUSIONS (OPTIONAL)

(______) __________________________________________________________________

              __________________________________________________________________

EFFECTIVE DATE

This power of attorney is effective immediately.

NOMINATION OF GUARDIAN (OPTIONAL)

INITIAL below ONLY if you WANT your acting agent to be your Guardian.

(______) If it becomes necessary for a court to appoint a guardian of my estate or a general guardian, I nominate my agent acting under this power of attorney to be the guardian to serve without bond or other security.

RELIANCE ON THIS POWER OF ATTORNEY

Any person, including my agent, may rely upon the validity of this power of attorney or a copy of it unless that person knows it has terminated or is invalid.

MEANING AND EFFECT

The meaning and effect of this power of attorney shall for all purposes be determined by the law of the State of North Carolina.

SIGNATURE AND ACKNOWLEDGMENT

___________________________________                    ______________________________
Your Signature                                                                        Date

___________________________________
Your Name Printed

State of _________________________, County of __________________________.

I certify that the following person personally appeared before me this day, acknowledging to me that he or she signed the foregoing document: _________________________________.

Date: ______________________________                    ______________________________
Signature of Notary Public

(Official Seal)

                                                                        __________________________, Notary Public
Printed or typed name

                                                                        My commission expires: ___________________

“IMPORTANT INFORMATION FOR AGENT

Agent’s Duties

When you accept the authority granted under this power of attorney, a special legal relationship is created between you and the principal. This relationship imposes upon you legal duties that continue until you resign or your authority is terminated or the power of attorney is terminated or revoked. You must:

(1)        Do what you know the principal reasonably expects you to do with the principal’s property or, if you do not know the principal’s expectations, act in the principal’s best interest;

(2)        Act in good faith;

(3)        Do nothing beyond the authority granted in this power of attorney; and

(4)        Disclose your identity as an agent whenever you act for the principal by writing or printing the name of the principal and signing your own name as “agent” in the following manner: (Principal’s Name) by (Your Signature) as Agent.

Unless the Additional Provisions and Exclusions in this power of attorney state otherwise, you must also:

(1)        Act loyally for the principal’s benefit;

(2)        Avoid conflicts that would impair your ability to act in the principal’s best interest;

(3)        Act with care, competence, and diligence;

(4)        Keep a record of all receipts, disbursements, and transactions made on behalf of the principal;

(5)        Cooperate with any person that has authority to make health care decisions for the principal to do what you know the principal reasonably expects, or if you do not know the principal’s expectations, to act in the principal’s best interest;

(6)        Attempt to preserve the principal’s estate plan if you know the plan and preserving the plan is consistent with the principal’s best interest; and

(7)        Account to the principal (or a person designated by the principal (if any)) in the Additional Provisions and Exclusions.

Termination of Agent’s Authority

You must stop acting on behalf of the principal if you learn of any event that terminated or revoked this power of attorney or your authority under this power of attorney. Events that terminate a power of attorney or your authority to act under a power of attorney include:

(1)        Death of a principal;

(2)        The principal’s revocation of the power of attorney or the termination of your authority;

(3)        The occurrence of a termination event stated in the power of attorney;

(4)        The purpose of the power of attorney is fully accomplished; or

(5)        If you are married to the principal, your divorce from the principal, unless the Additional Provisions and Exclusions in this power of attorney state that your divorce from the principal will not terminate your authority.

Liability of Agent

The meaning of the authority granted to you is defined in the North Carolina Uniform Power of Attorney Act. If you violate the North Carolina Uniform Power of Attorney Act or act outside the authority granted, you may be liable for any damages caused by your violation.

If there is anything about this document or your duties that you do not understand, you should seek legal advice.”  (2017-153, s. 1.)