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Power of Attorney in California: Guide and Requirements

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Table of Contents

Types of powers of attorney in California

How to get a power of attorney in california.

A power of attorney , or POA, in California is a legal document that allows you (the “principal”) to appoint another person (called an “agent” or “attorney-in-fact”) to make medical or financial decisions on your behalf.

In order to create a power of attorney that’s valid in California, it must meet these basic requirements:

You (the principal) must be at least 18 years old.

You (the principal) must have mental capacity, which means you can fully understand your POA and its consequences.

Your agent(s) must also be at least 18 years old and have mental capacity.

Your POA needs to be signed in the presence of a notary public, or it needs to be signed by two competent witnesses [0] California State Legislature . California Probate Code . Accessed May 5, 2023. View all sources .

If your POA gives your agent authority to take care of real estate transactions for you, you have to have the POA notarized.

If you live in a nursing home and create a medical POA, it needs to be witnessed by an ombudsman or patient advocate (this is in addition to the notary or can count as one of your two witnesses).

» MORE: How to choose a health care proxy

There are a variety of options for a California power of attorney.

Advance health care directive: This document is a combination of a classic medical POA, which allows your agent to make health care decisions on your behalf if you become unable to do so yourself, and a living will , which details your wishes and preferences regarding your medical treatment. You can’t use your agent, health care provider, health care provider’s employee, or anyone employed by a residential or community care facility as your witness.

Financial POA: This type of POA gives your agent the power to take care of your business or financial affairs.

Durable POA: If your power of attorney is durable , this means it remains effective even if you (the principal) become incapacitated and unable to make your own decisions. For a POA to be durable in California it needs to contain the words, “This power of attorney shall not be affected by subsequent incapacity of the principal,” or a similar statement [0] Orange County Superior Court . Power of Attorney . Accessed May 5, 2023. View all sources . 

General POA: This type of financial power of attorney gives your agent broad authority to manage your financial and business affairs (but not your medical affairs). Unless it is made durable, it terminates if you become incapacitated.

Limited POA: This type of financial power of attorney gives your agent authority only over specific areas and/or only for a limited time period. For example, you might grant your agent the power to pay your bills while you’re traveling abroad, sell or buy a piece of real estate, or file your tax return for you.

Vehicle POA: This type of limited financial POA allows your agent to represent you in all transactions involving the Department of Motor Vehicles.

Springing POA: A springing power of attorney only becomes effective if and when specified conditions are met, such as the principal becoming incapacitated or a beneficiary coming of age. A medical POA is “springing” because it only activates if you can no longer make medical decisions for yourself.

» MORE: Will vs. trust: Cost, process and uses

Here’s what you need to do to create a valid power of attorney in California:

Decide which type of power of attorney you need for your situation.

Decide exactly which types of authority you’d like to grant your agent.

Choose an agent (or agents) that you trust.

Obtain the proper POA form from an estate planning attorney , through online estate planning software , or by downloading forms from the state, where available.

Fill out your form carefully and sign it in the presence of required witnesses or notary public.

Give a copy of the form to your agent.

If your POA involves real estate transactions, file a copy with your land records office. In California, this is called the Office of the County Clerk-Recorder [0] County of Santa Clara Office of the County Clerk-Record . In-Person Services . Accessed May 5, 2023. View all sources . Additionally, consider giving a copy to your financial institutions or medical providers.

Store your POA in a safe place and update it as needed.

» MORE: Estate planning checklist: A 7-step guide

What are the power of attorney requirements in my state?

See the requirements for creating a valid power of attorney in these states:

That’s up to you. You can design your POA to become effective immediately upon signing, at some future specified date, or only if you become incapacitated.

That’s also up to you. You can set an expiration date or conditions for its termination. If your power of attorney is durable, it remains in effect until you die, unless one of the following happens: you revoke it, a court revokes it, or no agent is available.

If you need someone to represent you in matters with the California Tax Services Center (including filing your taxes), you can create an Individual or Fiduciary POA.

No. It’s against the law for your agent to take any of your assets unless you specifically gift them to your agent. And if you’re older than 65, your agent could be charged with elder abuse for taking any of your property without your authorization.

No. Your agent is allowed to do many things for you in California, but they can’t make or change your will, or establish a trust for you.

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POWER OF ATTORNEY

What is an irrevocable power of attorney.

By Joseph Nicholson

• Can a Power of Attorney Sign Loan Documents?

An irrevocable power of attorney is a document used in some business relationships. Whereas durable powers of attorney are usually used to give someone the authority to make decisions on your behalf in case you're in accident or unconscious, irrevocable power of attorney usually represents some contractual agreement in effect during your waking life. For most people, irrevocable power of attorney is therefore usually unnecessary.

Like any power of attorney, an irrevocable power of attorney gives an agent (the attorney in fact) the authority to make decisions, enter into contracts and generally act on the behalf of the person granting the power (the principal). Irrevocable powers of attorney are relatively rare, though, because they essentially operate like any other power of attorney, but are not unilaterally revocable by the principal. An irrevocable power of attorney can have a sunset provision, ending the assignment on a particular date or condition, but remains irrevocable until that time unless the parties agree to terminate.

There are a few situations where you might want to grant an irrevocable power of attorney. One might be if you enter into a contract where you authorize someone, such as a realtor or agent, to act exclusively on your behalf. An irrevocable power of attorney can grant that exclusive authority and limit your ability to get out of the agreement without consent from the other party. Another reason to grant an irrevocable power of attorney would be if you want to permanently dispose of assets, such as stocks or bonds, by transferring control of them to another party, such as the trustee of an irrevocable trust. A grant of irrevocable power of attorney can also be used as security on a loan. Read More: Explanation of Power of Attorney

Identification

A power of attorney is a document that identifies the parties to the agreement (the principal and the agent) and enumerates the powers or limitations created. State laws provide a uniform for powers of attorney with 13 areas where power can be granted, including real estate, stocks and bonds, litigation, banking and the formation of contracts. Any or all of these powers can be granted, limited or modified by a power of attorney, and additional powers can be added.

An irrevocable power of attorney creates a bond between the principal and agent, but one that is highly customized. For example, the irrevocable power of attorney with respect to real estate transactions can be limited to a single state or county. The powers granted with respect to securities can be limited in similar ways to certain kinds of transactions. Unless a sunset is specifically included in the document, the power of attorney cannot be revoked unless both the principal and agent agree, and execute a revocation. Otherwise, the power lasts until the death of the principal. The exception to this is when an ownership interest is conveyed along with the power of attorney, giving the agent the right to sell the asset under their own ownership rather than as agent of the deceased.

Just as an irrevocable power of attorney can have a date or condition that terminates the assignment of power, it can also have a date or condition precedent that sets it into effect. This is what's known as a springing power of attorney, because it automatically springs into effect on the set date or situation.

• Irrevocable Power of Attorney
• Choose Your Most Suitable Free Power of Attorney Form
• Irrevocable Power of Attorney (Real Estate)

Joseph Nicholson is an independent analyst whose publishing achievements include a cover feature for "Futures Magazine" and a recurring column in the monthly newsletter of a private mint. He received a Bachelor of Arts in English from the University of Florida and is currently attending law school in San Francisco.

Related Articles

• When Does a Power of Attorney Expire?
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Judicial Branch of California

Power of attorney.

Click on a topic below to learn more:

• What is a Power of Attorney?
• How can a Power of Attorney help me?
• Can my agent write or change my Will?
• Can my agent use my assets?
• What if I want to make a gift to my agent?
• Is it safe to use a Power of Attorney?
• Can I appoint more than one agent?
• Once the Power of Attorney is in effect, can I still make decisions on my own?
• Can the agent do those things for me, too?
• When does my Power of Attorney go into effect?
• How long does a Power of Attorney last?
• Where can I get a Power of Attorney form?
• How do I know what to include in my Power of Attorney?
• How can I be sure my Power of Attorney is valid?
• What if I create a Power of Attorney and later the court appoints a conservatorship for my estate?
• What can I do if there is a dispute about a Power of Attorney?
• Can I cancel or change my Power of Attorney?
• What if the agent is having problems getting others to recognize the Power of Attorney?

A Power of Attorney is a document that lets you appoint someone to represent you. If you sign a Power of Attorney, you are the principal. The person you appoint to represent you is called the agent or attorney-in-fact.

A Power of Attorney lets you authorize someone to handle a specific task, like signing documents for you while you are away. For example, your agent can sign sale documents or contracts for the purchase of a house, or to sell your car.

Or, your Power of Attorney can authorize your agent to handle on-going tasks.

Here are examples of tasks you can have your agent do:

• make bank deposits, withdrawals or other transactions
• trade stocks and bonds
• pay your bills
• buy or sell property
• hire people to take care of you
• file your tax returns
• arrange the distribution of retirement benefits
• negotiate and sign contracts
• apply for benefits like SSI or Medi-Cal

Your agent can do almost anything the Power of Attorney permits. You can also limit the kinds of financial decisions you want your agent to be able to make.

No. Your agent can establish a trust, but cannot make or change your Will (Probate Code Section 4264 ).

No. Unless you specifically make a gift to him or her, it is against the law for your agent to make gifts to him or herself.

If you are 65 or older, and your agent takes your property without authorization, s/he can be charged with elder abuse.

You can make a gift to your agent. However, if your Power of Attorney is a “Durable Power of Attorney,” i.e. one the remains in effect even if you become incompetent, a gift to your agent after you become incompetent may be restricted by law. This is because, if you are incompetent, it would be the agent who is deciding to make the gift of your property to him or herself. You may want to talk to a lawyer first.

It is safe if the person you appoint is trustworthy and competent. Be careful to appoint someone you trust completely. That person may be able to access your bank accounts, sell your house, buy and sell stock in your name, cancel your insurance, or perform other important and sensitive transactions.

Yes. Sometimes people appoint two or more people who make decisions for you together.

Or, you can appoint alternate agents. The alternate can step in if the other agent is unable or unwilling to serve.

Yes. You can make all the financial decisions you used to before you had a Power of Attorney.

Yes, your agent can.

You decide when it goes into effect. You can make it go into effect immediately (when you have all the needed signatures), or only if you lose the ability to make financial decisions.

You can decide if you want your Power of Attorney to expire on a certain date, or after your agent does a specific task. Or, your Power of Attorney can be durable. This means it will last either until you cancel it or until you die.

You can get a blank Power of Attorney form from:

• a stationery store or other store that sells pre-printed legal forms
• your estate planning lawyer, or
• a written copy of the correct language for Probate Code, § 4401, may be found at a law library, public library or on the Internet under the California Probate Code.

If you use a preprinted form, we recommend you use one that uses the same words as the Power of Attorney from Probate Code, § 4401. This is the form that banks, escrow companies, stockbrokers, and other institutions know best.

Some institutions, like banks, have their own Power of Attorney forms.

First, decide exactly what powers you want to give to your agent.

Then, ask yourself if you trust that person. Are there alternatives to a Power of Attorney?

Next, ask a lawyer for advice, or read about Powers of Attorney so you will understand what you are doing before you sign anything.

If you have one or more people you trust, and you know what powers you want to give them, you can find a preprinted document that matches your needs.

You must sign the Power of Attorney. You can ask someone to sign for you, but you have to watch him or her do it.

The document must be acknowledged by a notary public or signed by at least 2 adult witnesses. An agent cannot be a witness.

If you want the Power of Attorney to be durable, it must say either:

"This Power of Attorney shall not be affected by subsequent incapacity of the principal", or "This Power of Attorney shall become effective upon the incapacity of the principal", or similar words that show you want the document to be valid even if you become incapacitated.

Your Power of Attorney must comply with the provisions of the California Probate Code from Section 4000 through Section 4465.

Unless the Court or the conservator says otherwise, your agent can continue using the Power of Attorney to handle your affairs.

Your agent must tell you and the conservator about everything s/he does in your name.

You can end or cancel the Power of Attorney at any time. (See: Can I cancel or change my Power of Attorney? below.)

If your friends, relatives or officials are aware of problems with a Power of Attorney, they can file a petition with the Probate Department. The petition can ask the Court to review what the agent has done. The Court can decide to investigate further.

Yes. Cancel it in writing. Then, give your statement or new Power of Attorney to any institutions [like banks or stockbrokers] that had the old Power of Attorney.

Until you do this, they can still use your original document.

The agent can ask the Court for help by filing a petition to ask the Court for confirmation that s/he is acting as your lawful agent.

Or, if a bank or brokerage firm does not accept the Power of Attorney, your agent can ask the Court to order the institution to honor his/her authority.

See Probate Code Section 4540 .

Understanding Power of Attorney: A Comprehensive Guide to Properly Filling out Your Form

Navigating the world of legal documentation can be complex, especially when it comes to the power of attorney. This crucial document is a cornerstone of estate planning, allowing individuals to designate someone they trust to manage their affairs should they become unable to do so themselves.

In the intricate dance of legalities, understanding the form for power of attorney is essential. It’s not just about filling in blanks, but comprehending the implications, the responsibilities, and the authority it bestows.

Join us as we delve into the nuances of the power of attorney form, shedding light on its importance, its structure, and how to properly complete it. This guide is designed to empower you with knowledge, making the complex simple and the daunting manageable.

Table of Contents

Understanding Power of Attorney

Grappling with the concept of power of attorney constitutes a crucial part of estate planning. Delving into its intricacies allows one to make informed decisions.

The Importance of Power of Attorney

A Power of Attorney (POA), a powerful legal instrument, ensures the management of one’s affairs during incapacity. It confers rights to a trusted individual, referred to as the “Agent”, to act on the Principal’s behalf – managing money, property, or even making health-related decisions. People may consider POA as an umbrella against crises that create difficulties in assets handling or personal decision-making.

Varieties of Power of Attorney

Navigating the terrain of power of attorney reveals its diverse types with distinct roles and scopes. A ‘General Power of Attorney’ gives broad powers, extending from selling properties to making financial decisions. Conversely, a ‘Limited Power of Attorney’ confines the agent to a particular act, perhaps selling a car or home. An ‘Advance Directive’ or ‘Medical Power of Attorney’ grants authority to make health decisions when one becomes unable to do so. Multiple options tailor to various situations, underscoring the importance of understanding the types of power of attorney.

Key Elements in a Form for Power of Attorney

The form for power of attorney features several fundamental components. Each part, from the parties involved to the scope of authority and duration, carries its own weight, collectively contributing to the validity and effectiveness of this crucial legal instrument.

The Parties Involved

Two primary parties exist in any power of attorney form: the Principal and the Agent. The Principal represents the individual authorizing another person or entity to act on their behalf. For example, someone preparing for the likelihood of future incapacity might take on the role of Principal. The Agent, or the Attorney-in-fact, acts on the Principal’s behalf. For instance, a family member or trusted friend typically serves as the Agent, given the responsibility to manage financial or health-related decisions.

The Scope of Authority

The scope of a power of attorney denotes what actions an Agent can take on the Principal’s behalf. Different types of power of attorney, such as General Power of Attorney, Limited Power of Attorney, and Medical Power of Attorney, confer different scopes of authority. For example, a General Power of Attorney allows an Agent to perform a wide range of activities, from managing finances to making healthcare decisions, while a Limited Power of Attorney maintains a more narrow focus, giving authority in specific situations only.

Validity and Duration

A power of attorney only holds validity if the Principal is mentally competent during its execution. The law requires the Principal to understand the document’s implications and their rights to revoke it. The duration of a power of attorney varies—some become effective immediately, while others only under specified conditions. For example, a Durable Power of Attorney remains in effect even if the Principal becomes incapacitated, whereas a Springing Power of Attorney only enters into effect when a specified event, like the Principal’s incapacitation, occurs.

Preparing a Form for Power of Attorney

Mastering the process of preparing a form for power of attorney forms an integral part of competent estate planning. The following section delves into the detailed step-by-step process and the role of a lawyer in this critical task.

Step-by-step Process

The process for preparing a power of attorney form involves a few essential steps. First, decide on the type of power of attorney instrument – General, Specific, or Medical, depending on the scenario. This varies per the extent of power delegated by the Principal to the Agent.

After identifying the type of power of attorney, the Principal names the Agent. It’s crucial to choose a person of trust since they gain decision-making authority over the Principal’s affairs.

Next, detail the authority entrusted to the Agent. The range of power might encompass every aspect of the Principal’s life for a General Power of Attorney, limited actions for a Limited Power of Attorney, or health-related decisions for a Medical Power of Attorney.

Once the authorities are outlined, the form must be duly filled and signed by the Principal. However, bear in mind the form gains legitimacy only if the Principal is mentally competent at the time of signing.

Finally, the signature needs to be notarized or witnessed, depending on the jurisdiction’s legal requirements.

Role of a Lawyer

Engaging a lawyer in preparing a power of attorney form can provide valuable insights. Being specialists in the field of law, they are equipped with the knowledge to clarify ambiguous aspects.

A lawyer deciphers the legal jargon often mentioned in power of attorney forms, ensuring the Principal comprehends the extent of power they confer. They elucidate all implications arising from authorizing an Agent, making the Principal aware of potential scenarios.

Additionally, a lawyer’s role extends to assisting in the selection of the type of power of attorney, tailoring it to suit the Principal’s specific needs. They also ensure the Principal’s intentions are explicitly stated, reducing scope for future misuse.

Thus, a lawyer serves as a dependable guide in the complex process of preparing a form for power of attorney, enhancing the Principal’s confidence in the resultant document.

When To Use a Form for Power of Attorney

A form for power of attorney proves crucial during various circumstances. It’s an effective legal tool for managing different scenarios that require representation in financial and personal matters.

Instances Requiring Power of Attorney

Several situations call for the use of a form of power of attorney. One such instance revolves around healthcare decisions. If an individual becomes unable to communicate or make medical decisions, a medical power of attorney enables the designated agent to make such decisions on that person’s behalf.

Another crucial situation involves financial matters—a particularly convenient tool in managing the Principal’s affairs during prolonged periods abroad or when physically prevented from handling financial affairs independently. It might also be due to certain illnesses or accidents rendering a person mentally incapacitated, hence incapable of managing their financial affairs.

For businesses, the use of the form becomes necessary in the case of the principal’s absence, such as traveling or hospitalization. The agent, in this case, has the authority to make business decisions on the principal’s behalf. An example might be the signing of contracts or handling business transactions.

Preventative Measures

As a preventative measure, the form for power of attorney is beneficial. It provides a contingency plan in the event of unexpected situations that might render a person incapable of making their own decisions. An example is the preparation for sudden or progressive health conditions that could affect a person’s cognitive abilities, such as Alzheimer’s disease or stroke.

Moreover, older adults might establish durable power of attorney as part of their estate plan to manage potential scenarios such as developing age-related cognitive disorders. It ensures that their assets and personal care remain in trusted hands, according to their preferences.

Finally, anyone with detailed specific wishes for future healthcare decisions benefits from having a healthcare power of attorney. It ensures that they can communicate their wishes through a trusted agent, even if they become unable to express these preferences directly.

Mistakes to Avoid While Drafting a Form for Power of Attorney

Errors made during the crafting of a power of attorney form can lead to severe consequences, impacting the principal’s desired management of their affairs. Knowledge of these pitfalls aids in the prevention of such missteps.

Common Pitfalls

Mistakes in power of attorney forms are frequent, but fortunately, they’re avoidable. One misstep involves unspecific or overly general instructions, creating confusion about the agent’s powers. For instance, stating that the agent has “broad authority in healthcare matters” without delving into specifics (e.g., medical procedures, end-of-life choices) can lead to ambiguity.

Another common error is the selection of an unfit or untrustworthy agent. The agent’s role is critical; hence, appointing someone unfit or dishonest can harm the principal. For example, an agent without financial acumen may mismanage the principal’s funds, leading to financial loss.

Failing to consider the durability of the power of attorney is another pitfall. Some forms become invalid once the principal loses mental competence, while a “Durable Power of Attorney” remains in effect, illustrating the need for thorough understanding of document types.

Lastly, neglecting to keep the power of attorney document updated can lead to complications. For instance, if the appointed agent is no longer able or willing to serve, an outdated form could lead to ineffective management of the principal’s affairs.

Legal Consequences of Flawed Documents

A flawed power of attorney document implies numerous legal consequences. If the document is vague or lacks specificity, decisions made by the agent may not reflect the principal’s wishes. For instance, an agent might make financial investments that the principal would have never consented to, leading to potential financial loss or legal disputes.

Moreover, if an unfit agent gets appointed, they could misuse the power granted to them, leading to legal battles, wasted resources, and damaged relationships, like if the agent uses the principal’s funds for personal benefit.

Additionally, if the power of attorney document is not legally valid due to failure to follow required formalities (e.g., lacking necessary signatures or notarization), it could lead to the form’s rejection by financial institutions or other parties, causing a delay in the execution of the principal’s intended actions.

Thus, while crafting a power of attorney form, it’s crucial to avoid these mistakes to ensure the accurate and effective representation of the principal’s desires, avoiding any unanticipated legal repercussions.

Understanding the power of attorney form is crucial for effective estate planning. It’s a legal tool that ensures a trusted individual can manage your affairs when you’re unable to. Whether it’s a General, Limited, or Medical Power of Attorney, each has its unique role and is tailored to different situations. The key elements of this form, including the Principal and the Agent, and the scope of authority, are essential to grasp. It’s also vital to understand its validity and duration, which can differ based on the type of power of attorney.

The process of preparing this form is intricate, which is why it’s recommended to engage a lawyer. They’ll guide you through the legal jargon, tailor the document to your needs, and ensure your intentions are clearly stated. Remember, this form is preventative in nature and can be used in various circumstances, from healthcare decisions to managing financial matters during periods of incapacity or absence.

Avoid common mistakes while drafting this form, such as vague instructions or selecting an unfit agent, as these can lead to severe legal consequences. Careful drafting ensures the document accurately reflects your wishes and helps avoid unanticipated repercussions.

What is a power of attorney?

A power of attorney is a legal document that allows a trusted individual, known as the “Agent,” to manage the affairs of another person, the “Principal.” The responsibilities may encompass financial management, health-related decisions, and more, depending upon the scope of authority granted by the Principal.

What are the types of power of attorney?

The various types of power of attorney include the General Power of Attorney, Limited Power of Attorney, and Medical Power of Attorney. Each type grants different levels and scopes of authority to the Agent to address varied situations.

What is the validity of a power of attorney?

A power of attorney is valid only if the Principal is mentally sound at the time of its execution. Its duration can vary, with some forms remaining valid even during the Principal’s incapacity.

How do you prepare a power of attorney?

Preparing a power of attorney involves choosing the right type, naming an Agent, defining the scope of authority, and ensuring proper signing and notarization. Legal advice may prove invaluable in avoiding errors and inaccuracies in the document.

When should one use a power of attorney?

A power of attorney can be used under various circumstances such as managing financial affairs during incapacity or absence, making healthcare decisions when the Principal is unable to do so, or in a business setting where the Agent makes decisions on behalf of the Principal.

What are common mistakes to avoid while preparing a power of attorney?

Common errors when drafting a power of attorney include vague instructions, choosing an inappropriate Agent, not considering the document’s durability, and failing to keep it updated. Mistakes may lead to severe legal issues, potential financial loss, and disputes.

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A power of attorney form lets you choose a trusted friend or relative to help you with your finances and/or health care decisions. #9608EN

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Frequently asked questions (faq), download instructions and blank forms, get legal help, related resources.

It’s simple: we ask you questions and use your answers to complete your forms. Link takes you to a separate website. Or you can download instructions and blank forms below.

A power of attorney form lets you choose a trusted friend or relative to help you with your finances and/or health care decisions. After you sign it, the person you choose will take the power of attorney to your medical providers, bank, school, and other places to make decisions and sign contracts just as if they were you.  

The trusted friend or relative you choose to help you with your finances and/or health care decisions is called your "agent."

A power of attorney is "durable" if it says that your agent can use it even if you become sick or injured and cannot make decisions for yourself.

You should sign your Durable Power of Attorney forms in front of a notary. If you cannot find a notary, you can sign it in front of two "disinterested" witnesses instead. However, notarization is preferred, especially for a Durable Power of Attorney for Finances.

After you sign your forms, make 2 copies. Give the original form to your agent, give one copy to your alternate agent, and keep the second copy for yourself.

Yes. You can cancel (you can revoke ) your power of attorney at any time with a written notice to your agent. Our Cancel (revoke) a Power of Attorney packet has the form and instructions to do this.

After you revoke your old power of attorney, you can sign a new power of attorney form to choose a different agent. In your new power of attorney form, make sure it says all earlier power of attorney forms are revoked.

Sometimes a bank or other business will tell your agent that they won't accept your power of attorney form. There are 2 common reasons this may happen:

• Form Not Notarized : Washington law says your power of attorney form is valid when you sign it in front of a notary or in front of two disinterested witnesses. But some banks or other businesses insist that it must be notarized. You can sign a new form in front of a notary. But your agent can also ask to speak to their legal department and point out Revised Code of Washington (RCW) 11.125.050 . If your form was properly witnessed by two uninterested witnesses instead of being notarized, the form is still valid under Washington law. Your bank should accept it.
• Not the "Right" Form : The power of attorney forms included in this packet are valid under Washington law, but some banks and other businesses want you to use their form. If a bank or other business won't accept your power of attorney form, your agent can ask to contact their legal department and point out RCW 11.125.050 and RCW 11.125.200(3)(a) .

Agents can be asked for certification. The bank may say they will accept the power of attorney only if the agent signs a "certification" statement confirming that the power of attorney form is valid. This is legal. However, if the bank wants a certification statement, they must ask for it within 7 days of the day you give them the power of attorney form. Only the agent has to sign the certification statement.

Try to get legal help if a bank or institution is denying your form or requiring you to use their forms.

• Agent : the trusted person you choose to help you with your finances or health care.
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• Government & Policy

Assignee: What it is, How it Works, Types

Michelle P. Scott is a New York attorney with extensive experience in tax, corporate, financial, and nonprofit law, and public policy. As General Counsel, private practitioner, and Congressional counsel, she has advised financial institutions, businesses, charities, individuals, and public officials, and written and lectured extensively.

Ariel Courage is an experienced editor, researcher, and former fact-checker. She has performed editing and fact-checking work for several leading finance publications, including The Motley Fool and Passport to Wall Street.

What Is an Assignee?

An assignee is a person, company, or entity who receives the transfer of property, title, or rights from another according to the terms of a contract. The assignee receives the transfer from the assignor. For example, an assignee may receive the title to a piece of real estate from an assignor.

Key Takeaways

• An assignee is a person, company, or entity who receives the transfer of property, title, or rights from a contract.
• The assignee receives the transfer from the assignor.
• An assignee may be the recipient of an assignment, a liability, or appointed to act in the stead of another person or entity.
• The assignee typically will hold the rights of power of attorney only for a specified time or for particular circumstances.
• Once the time has expired or the circumstances have been resolved, the assignee would automatically relinquish those rights.
• Not all assignment contracts are required to be made in writing, but they often are.

How an Assignee Works

An assignee may be the recipient of an assignment, a liability, or appointed to act in the stead of another person or entity. For example, an executor of an estate may be appointed through a will left by a decedent.

Types of Assignees

Assignee in real estate.

An assignee is the recipient of a title when a deed is signed to confer ownership of property in a transaction. A tenant might choose to transfer their property rights to an assignee who would assume duties for paying rent and tending to the property. There may be limits to the rights and liabilities that are granted to an assignee based on the nature of the transfer or assignment of rights.

For example, an assignee might take on the property rights from a tenant who vacated a rental property, but the tenant may still be liable if the assignee does not make rent payments on time. An assignee who takes title and ownership of real estate might not have certain rights to use the property any way they wish. There may be rights of ingress and egress that must be negotiated with adjacent property owners who hold surrounding land parcels. The assignee could receive certain rights that run with the land when they are granted the title.

Assignment by Power of Attorney

Power of attorney may be assigned to a person to tend to certain affairs for a person while they are out of the country or not capable of taking action for themselves. The assignment of power of attorney can grant broad rights or be limited in scope by the terms set by the assignor. The rights could be for the specific handling of a contract or business deal that the assignor cannot be present for.

The assignee typically will hold the rights of power of attorney only for a specified time or particular circumstances. Once the time has expired or the circumstances have been resolved, the assignee would automatically relinquish those rights. It is possible that the terms of power of attorney might allow an assignee to act in their self-interest rather than for the interests of the assignor.

Assignee in an Insurance Policy

In the context of a life insurance policy, interest in a policy can be transferred from the policyholder to a lender or relative by assignment of the policy. In this case, the policyholder is the assignor and the person in whose favor the policy has been assigned is called the assignee.

Assignee in a Contract

When one party to a contract—the assignor—hands off the contract's obligations and benefits to a different party—the assignee—this is known as an assignment of contract. In this situation, the assignee assumes all the rights and responsibilities of the contract from the assignor. All, or a portion, of a letter of credit can be assigned to a third party to pay vendors and suppliers.

Assignee in a Loan

An assignee is a person or a company that buys your loan. For example, an auto dealer that extends credit to individuals may sell their loans to a bank. In this case, the bank is the assignee and the auto dealer is the assignor. If your loan has been sold, you owe money to whoever owns your loan. In the event that responsible parties fail to meet their loan obligations, the assignee has a lien on the vehicle and can repossess it.

Not all assignment contracts are required to be made in writing, but they often are. Assignment contracts may also need to be notarized and witnessed in order to be valid. The assignment of property and collateral for loans must be in writing. Note that not all rights, contracts, or other property are assignable; many contracts, particularly real estate leases and personal service agreements, explicitly prohibit assignment. 

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31 CFR § 306.95 - Attorneys in fact.

(a) General. Assignments by an attorney in fact will be recognized if supported by an adequate power of attorney. Every power must be executed in the presence of an authorized certifying officer under the conditions set out in § 306.45 for certification of assignments. Powers need not be submitted to support redemption-exchanges or exchanges pursuant to advance refunding or prefunding offers where the securities to be issued are to be registered in the same names and forms as appear in the inscriptions or assignments of the securities surrendered. In all other cases, the original power, or a photocopy showing the grantor's autograph signature, properly certified, must be submitted, together with the security assigned on the owner's behalf by the attorney in fact. An assignment by a substitute attorney in fact must be supported by an authorizing power of attorney and power of substitution. An assignment by an attorney in fact or a substitute attorney in fact for the apparent benefit of either will not be accepted unless expressly authorized. (Form PD 1001 or 1003, as appropriate, may be used to appoint an attorney in fact. An attorney in fact may use Form PD 1006 or 1008 to appoint a substitute. However, any form sufficient in substance may be used.) If there are two or more joint attorneys in fact or substitutes, all must unite in an assignment, unless the power authorizes less than all to act. A power of attorney or of substitution not coupled with an interest will be recognized until the Bureau receives proof of revocation or proof of the grantor's death or incompetency.

(b) For legal representatives and fiduciaries. Assignments by an attorney in fact or substitute attorney in fact for a legal representative or fiduciary, in addition to the power of attorney and of substitution, must be supported by evidence, if any, as required by §§ 306.57(d) , 306.66(b), 306.75, and 306.76. Powers must specifically designate the securities to be assigned.

(c) For corporations or unincorporated associations. Assignments by an attorney in fact or a substitute attorney in fact in behalf of a corporation or unincorporated association, in addition to the power of attorney and power of substitution, must be supported by one of the following documents certified under seal of the organization, or, if it has no seal, sworn to by an officer who has access to the records:

(1) A copy of the resolution of the governing body authorizing an officer to appoint an attorney in fact, with power of substitution, if pertinent, to assign, or to sell, or to otherwise dispose of, the securities, or

(2) A copy of the charter, constitution, or bylaws, or a pertinent extract therefrom, showing the authority of an officer to appoint an attorney in fact, or

(3) A copy of the resolution of the governing body directly appointing an attorney in fact.

(d) For public corporations. A general power of attorney in behalf of a public corporation will be recognized only if it is authorized by statute.

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Final Rule Revision of Power of Attorney and Assignment Practice More Information

• Frequently Asked Questions - Revision of Power of Attorney and Assignment Practice (updated 11Feb2005)
• Executive Summary of Revision of Power of Attorney and Assignment Practice 69 Fed. Reg. 29865 (26May2004) [PDF]
• Effective Date 25 June 04 ! Revision of Power of Attorney and Assignment Practice published at 69 Fed. Reg. 29865 [PDF] (26May2004)

Slide Set: Clarification of Power of Attorney Practice and Revisions to Assignment Rules [PPS] [ text version ] [ Download Zipped Full Version ][1.3MB](posted 16July2004)

Abridged Slide Set: Clarification of Power of Attorney Practice and Revisions to Assignment Rules [ text version ] [ Download Zipped Abridged Version ] [160KB] (posted 22June2004)(this slide set does not include Private and Public PAIR screen shots showing examples of how an user would navigate through PAIR)

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• Contract Administration

Assignment of Claims and Power of Attorney

By earbinov December 6, 2018 in Contract Administration

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I work at a financial institution that lends to small business government contractors. 

We've had a borrower go radio silent on us and they are in default on their debt with my company. The loan agreement provides us with the irrevocable right to act as power of attorney/agent-in-fact for the borrower. As such, we've prepared a number of assignment of claims documents to ensure that we are perfecting our security interest and that the payments associated with the contracts under which the borrower is performing will be routed to our control account to pay down all outstanding balances. 

We are getting pushback from certain COs stating that the borrower has intervened and since they have privity of contract, they would need to approve of any assignment. I have provided the loan agreement and other loan documents (including a cooperation agreement and a deposit account control agreement), all of which essentially require the borrower to not interfere with any efforts by us to perfect our security interest in the collateral (namely, the A/R related to all government contracts). 

Is there anything I can say or do here short of seeking an injunction to compel the COs to effectuate the aforementioned assignments. My understanding is that effectuating an assignment of claims is a ministerial act. Unless the contract contains a clause prohibiting the assignment (and assuming the contract  contains  the clause permitting it), then there is no discretion afforded to the CO assuming a valid assignment is submitted. In this case, I'm assuming that the bank signing using POA does provide for a valid assignment, but perhaps that is not a correct assumption. 

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Have you complied with FAR 32.802(e)?

Are you registered in SAM amenable to FAR 32.805(d)(4)?

FAR 32.805(a)(1), (2), and (3) list who make assignments -- a contractor's attorney-in-fact is not listed there.  Could that be part of the problem?

Quote 5 hours ago, ji20874 said: Have you complied with FAR 32.802(e)?  Are you registered in SAM amenable to FAR 32.805(d)(4)? FAR 32.805(a)(1), (2), and (3) list who make assignments -- a contractor's attorney-in-fact is not listed there.  Could that be part of the problem?  

Yes, I have compiled and always do comply with FAR 32.802(e). For what it's worth, I'm a former Contract Specialist so I know my way around the FAR and how to communicate with COs. 

Yes - we are registered in SAM. 

With respect to FAR 32.805(a)(1), (2), and (3) - while it is true that a contractor's attorney-in-fact is not listed there, that same list only specifies requirements for corporations, partnerships, and individuals. Many of our borrowers are LLCs and so the FAR is silent on how to treat those types of entities. Furthermore, unless something is explicitly and specifically prohibited in the FAR, the CO/specialist can generally exercise their best judgment (See FAR 1.102(d)). Lastly, the underlying common denominator between these sections is that whoever is signing the assignment is authorized to do so. I believe I've provided sufficient evidence and context which supports the bank signing using power of attorney privileges.  

joel hoffman

I would suggest requesting a face to face meeting with the KO and request that government counsel also be present. Then lay out your legal arguments. Time is of the essence here. 

Perhaps you’ve done that already. 

If the KO and the government’s attorney don’t provide satisfaction, then- as the Swamp People would cry out v“Chute ‘em,   Lizbeth!!!”

I should add that our borrower has explicitly intervened and advised the government to not process any assignment and that they do not approve. I am arguing to the contracting officer that the assignment package we've submitted is valid, and therefore should be effectuated immediately. Notwithstanding protests from the borrower, once a valid notice of assignment is received, the Government is compelled to process the assignment as it is a ministerial act. However strange it may be for a contractor to plainly oppose an assignment, I feel that the contractor (our borrower) has essentially revoked their authority to weigh in on the matter once they signed the loan agreement and appointed us as power of attorney. Also, I'm arguing that the FAR lays out the procedure for the release of claims, and emails/calls stating they don't want an assignment are not included in those procedures. 

Lastly, the following case law supports my argument that the assignment should be effective, so long as it is valid, upon receipt and acknowledgment, which the Government has now indicated/signaled:

US Court of Appeals -  CENTRAL NAT. BANK OF RICHMOND, VA. v.   UNITED STATES.

Excerpt : "Generally, notice of an assignment is effective as of the time of its receipt, and according to official Government records, the plaintiff's notices were all received prior to the disbursement made"

"Plaintiff's assignment was made pursuant to the Act of 1940 and notice thereof was given in the manner and to the officials as required. Having so complied with the act, plaintiff [bank] is entitled to that degree of protection ordinarily given to an innocent assignee who acts in good faith."

The Comptroller General has "Recogniz[ed] that, in legal effect, acknowledgment of receipt was nothing more than a recognition that the documents had been received..."    [in other words, merely a ministerial act, without discretion to decide if the assignment will be "accepted"]

" We can perceive of no good reason why the various offices to whom notices of assignment are to be given under the act should not be held to the same degree of responsibility and liability as any others to whom such notices are given in everyday commercial transactions."

"The Government having received timely notice of plaintiff's assignment paid [contractor/assignor] at its peril."

Comptroller General Warren to the Board of Governors, Federal Reserve System (see attached)

Excerpt : " ASSIGNMENTS MADE UNDER THE ASSIGNMENT OF CLAIMS ACT OF 1940 WILL BE ACKNOWLEDGED BY THIS OFFICE IMMEDIATELY UPON THEIR RECEIPT, WITHOUT PRIOR EXAMINATION, SUCH ACKNOWLEDGMENT IMPLYING NOTHING MORE THAN A RECOGNITION THAT THE NOTICES OF ASSIGNMENT AND ASSIGNMENT INSTRUMENTS HAVE BEEN RECEIVED, LEAVING ANY QUESTION AS TO THE VALIDITY OR REGULARITY OF THE ASSIGNMENT FOR CONSIDERATION IN CONNECTION WITH THE AUDIT OF PAYMENTS MADE UNDER THE CONTRACTS INVOLVED."

" SINCE, IN LEGAL EFFECT, THE ACKNOWLEDGMENT OF RECEIPT BY THIS OFFICE IS NOTHING MORE THAN THE WORD IMPLIES—- A RECOGNITION THAT THE DOCUMENTS REFERRED TO HAVE BEEN RECEIVED IN THIS OFFICE—- AND IN VIEW OF THE DIFFICULTIES ILLUMINATED BY YOUR LETTER AND ENCLOSURES, THIS OFFICE SHALL HENCEFORTH ACKNOWLEDGE RECEIPT OF THE NOTICES OF ASSIGNMENT AND ASSIGNMENT INSTRUMENTS IMMEDIATELY UPON RECEIPT THEREOF WITHOUT PRIOR EXAMINATION—- LEAVING ANY QUESTION AS TO THE VALIDITY OR REGULARITY OF THE ASSIGNMENT FOR CONSIDERATION IN CONNECTION WITH THE AUDIT OF PAYMENTS MADE UNDER THE CONTRACT INVOLVED."

" IT SHOULD BE CLEARLY UNDERSTOOD THAT HENCEFORTH THE PROCESS OF ACKNOWLEDGING SUCH NOTICE OF ASSIGNMENT WILL BE PURELY MINISTERIAL IN NATURE AND IN NO SENSE AN INDICATION THAT THE ASSIGNMENT HAS BEEN EXAMINED IN THIS OFFICE AND FOUND TO BE REGULAR AND VALID."

GAO Decision B-270801:

https://www.gao.gov/products/470539#mt=e-report

Excerpt : “It is well-settled that once an obligor (the United States in this case) has notice of a valid assignment, as in the present case, it pays the assignor at its peril and is, therefore, liable to the assignee for the amount of the erroneous payment."  [Citing Central Bank of Richmond, Virginia v. United States, 117 Ct. Cl. 389 (1950)).

COMPTROLLER GENERAL WARREN TO THE BOARD OF GOVERNORS FEDERAL RESERVE SYSTEM.doc

Great, so problem solved ! Good luck. 

You may be barking up the wrong tree.  Is there case law where the assignment was made by power of attorney (assignor (the bank) and assignee (the bank) are the same), over the objection of the contractor (who is supposed to be the assignor)?  I think that is your problem area.  

36 minutes ago, ji20874 said: You may be barking up the wrong tree.  Is there case law where the assignment was made by power of attorney (assignor (the bank) and assignee (the bank) are the same), over the objection of the contractor (who is supposed to be the assignor)?  I think that is your problem area.  

Yeah - that's the grey area here. The FAR is silent on how to treat LLCs with respect to 32.8, and I couldn't find any case law on this particular question - that is, executing an assignment as agent-in-fact. To be clear, the assignor is still the borrower (with whom the government has privity), despite the fact that the bank is signing as their agent-in-fact. The question is whether signing as agent-in-fact comports with 32.8. 

Ultimately, I think it's a judgement call of each KO. If we game this out...the bank would sue the borrower and, absent them filing for bankruptcy, we would likely get summary judgement resulting in an injunction that compels the borrower to sign any document we need them to. If they don't sign (as they are choosing to do now), then I would be very surprised if, after we sent all of the legal supporting documentation (summary judgement/injunction) with each assignment, any KO would still refuse to process/effectuate the assignment. 

At that point, we may  then arguably go after the Government for all amounts paid to the contractor after receipt of the notice, depending on if a court finds the notice signed using POA is valid. If it's valid, the government would have to pay. 

On ‎12‎/‎6‎/‎2018 at 10:43 PM, earbinov said: I am arguing to the contracting officer that the assignment package we've submitted is valid, and therefore should be effectuated immediately.

In addition to what ji wrote, we only have your opinion that there is a valid assignment.  We have no way of knowing whether that is true and whether you have been able to demonstrate the validity of the assignment to the various COs.

29 minutes ago, Retreadfed said: In addition to what ji wrote, we only have your opinion that there is a valid assignment.  We have no way of knowing whether that is true and whether you have been able to demonstrate the validity of the assignment to the various COs.

Agreed. Are you a CO? I'm curious what your opinion is here given the fact pattern presented above on if the submitted package is valid. 

I am  retired from the Federal government and now work in the private sector.  However, some issues I see are what is the precise language of the power of attorney? What is the law of the state that governs your transaction with the contractor in regard to powers of attorney?  What language is in the contracts regarding assignment?  What specific objections to the COs have to recognizing the assignment?  What have you done to alleviate their concerns?

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