How to Give a Power of Attorney in North Carolina

Under North Carolina law, a power of attorney (POA) is effective when it is executed. A POA is a legal authorization that gives someone the power to take actions on behalf of the grantor, or principal. The person giving an agent a power of attorney, signs the document.

In order for the existence of a POA to become public knowledge, an individual should file the document with the county register of deeds office. The POA being on file with this government office confirms that an agent who takes action such as selling the principal's real property has the power to do so.

A power of attorney form must be signed by the principal. Alternatively, it can be signed in the principal’s conscious presence, meaning that the principal is conscious and is present at the time the document is signed. A third person might need to sign for the principal if the principal has a physical disability such that they cannot sign themselves.

The person signing for the principal should sign the principal's name on the POA document. The POA document must also be acknowledged, meaning that a notary public must certify that they witnessed the principal or the person acting on the principal's behalf sign the POA form.

The signature of the principal or person signing on their behalf is presumed to be genuine if the notary acknowledges the signing. An individual completing a POA form can hire an estate planning attorney or other type of attorney to assist them with completing the form.

Durable power of attorney means the power of attorney remains in effect after the principal’s health declines to the extent that they cannot handle their own affairs. In North Carolina, a power of attorney is durable unless the instrument expressly provides that it is terminated by the incapacity of the principal.

Incapacity means the physical and/or mental condition of the principal has deteriorated to the point that the principal can no longer direct the agent.

The exception to the rule that a power of attorney becomes effective when the document is executed is if the principal provides in the POA form that the power becomes effective at a future date. The POA can also become effective upon the occurrence of a future event or contingency.

If the POA becomes effective only when a specific event occurs, the principal can provide in the POA document an authorization that requires one or more persons to determine in writing that the event occurred.

A power of attorney terminates when one or more events occur:

• Principal dies.
• If the POA is not durable, when the principal becomes incapacitated.
• Principal revokes the power of attorney.
• POA provides that it terminates.
• Purpose of the POA is accomplished.
• Principal revokes the agent’s authority.
• Agent dies, becomes incapacitated or resigns, and the POA does not provide for another agent to act under the POA.
• Guardian of the principal’s estate or general guardian terminates the POA.

An agent’s authority terminates when any of these events occur:

• Principal revokes the agent’s authority in writing.
• Agent dies, becomes incapacitated, resigns or is removed.
• Court enters a decree of divorce between the principal and the agent, unless the power of attorney provides otherwise.
• Power of attorney terminates.
• Guardian of the principal’s estate or general guardian terminates the authority.

Typically, the individual with power of attorney, or the agent, has a general power of attorney. This means the agent can do any and all of the things that the North Carolina Uniform Power of Attorney Act (Chapter 32C) allows.

If an agent has less authority, they have a special or limited power of attorney. This type of power of attorney means that the POA form lists the particular powers of the agent. For example, an agent can have health care power of attorney to make medical decisions, but not real estate power of attorney.

A POA form must expressly grant authority to the agent to take any of the actions listed below. The phrase "expressly grant" means that the POA form must spell out that the agent has specific powers to:

• Make a gift.
• Create or change rights of survivorship, such as a right granted to joint tenants. A survivor may claim ownership rights to the entire property upon the death of the other joint tenant.
• Create or change a beneficiary designation, such as a person who will receive property under an insurance policy.
• Delegate authority granted under POA.
• Waive the principal's right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan.
• Exercise fiduciary powers that the principal has authority to delegate. A fiduciary power is the power to act in another party’s best interest. For example, a principal may delegate a person to create a trust on their behalf.
• Renounce or disclaim property, including a power of appointment.
• Exercise authority over the content of electronic communication sent or received by the principal.

An agent may take the additional actions listed below only if the POA or terms of a trust expressly grant to the agent these authorities:

• Exercise the powers of the principal as settlor of a revocable trust, meaning a trust that can be modified.
  
• Exercise the powers of the principal as settlor of an irrevocable trust to consent to the trust's modification or termination. An irrevocable trust cannot be modified after it has been created.

Even if an agent has a grant of authority to undertake an act such as to make a gift, they may exercise that authority only if the agent determines the action is consistent with the principal’s objectives, if actually known by the agent.

If the principal’s objectives are unknown by the agent, the agent must determine that their actions are consistent with the principal’s best interest based on all relevant factors. These include:

• Value and nature of the principal's property.
• Principal's foreseeable obligations and need for maintenance, meaning the financial obligations the principal will have to survive, such as food expenses.
• Minimization of taxes, including income, estate, inheritance, generation-skipping transfer and gift taxes.
• Eligibility for a benefit, a program or assistance under a statute or regulation.
• Principal's personal history of making or joining in making gifts.
• Principal's existing estate plan.

Even if an agent has the power of attorney to take an action such as to make a gift, they may not exercise authority under a POA to create in themselves or in an individual to whom the agent owes a legal obligation of support, an interest in the principal's property, whether by gift, right of survivorship, beneficiary designation, disclaimer or otherwise. The exception is if the POA allows them to create such an interest.

An agent may be compensated for their work. If the terms of the POA specify the amount or the way in which compensation is to be determined, the agent is entitled to the compensation specified. If the terms of the POA do not specify the amount or how compensation is to be determined, and the principal thereafter becomes incapacitated, the agent is entitled to receive reasonable compensation as determined by the clerk of superior court.

Unless the POA otherwise provides, an agent is entitled upon request to the clerk of superior court to be reimbursed for expenses properly incurred on behalf of the principal.

An agent accepts appointment as an agent by exercising authority, performing duties as an agent or other conduct or assertion indicating acceptance. The agent does not need to sign the POA form or any other documents.

The exception is if the POA form provides that the agent must sign the POA form or the other documents. The exception to the rule that the POA accepts appointment by exercising authority is if the POA form provides that the agent must accept appointment in a different way. Then the agent must accept appointment in accordance with the terms of the POA.