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Mandatory requirements operate in respect of the design and execution of many Powers of Attorney for commercial purposes created by a person in the Six (6) Greater States.[1]
MANDATORY REQUIREMENT SUMMARIES
| Custom-Made Powers of Attorney |
| Government Form || Combined Summary |*
*Combined Summary includes the Custom-Made and Government Form requirements.
In Texas, any mandatory requirements imposed in respect of Powers of Attorney for a person[2] only apply in respect of durable Powers of Attorney.[3]
Mandatory requirements apply to:-
In some of the Six (6) Greater States, Powers of Attorney for commercial purposes used by persons[4] must include certain notices:
In Texas, Florida and Illinois there are no notices required for inclusion in a Power of Attorney.[8]
Durable Powers of Attorney for commercial purposes used by persons[9] in California, Texas and Florida must include certain words:
In California, §4018 provides that a durable Power of Attorney[10] must satisfy requirements, in particular the inclusion of these (or similar) words found in §4124:
"A durable Power of Attorney is a Power of Attorney by which a principal designates another person as attorney-in-fact in writing and the power of attorney contains any of the following statements:
(a) “This Power of Attorney shall not be affected by subsequent incapacity of the principal.”
(b) “This Power of Attorney shall become effective upon the incapacity of the principal.”
(c) Similar words showing the intent of the principal that the authority conferred shall be exercisable notwithstanding the principal's subsequent incapacity."
§751.002 provides that durable Power of Attorney[11] must comply with the requirements of §751.0021(a)
§751.0021(a) states:-
"An instrument is a durable Power of Attorney for purposes of this subtitle if the instrument..
(3) contains:
(A) the words:
(i) “This Power of Attorney is not affected by subsequent disability or incapacity of the principal”; or
(ii) “This Power of Attorney becomes effective on the disability or incapacity of the principal”; or
(B) words similar to those of Paragraph (A) that clearly indicate that the authority conferred on the agent shall be exercised notwithstanding the principal's subsequent disability or incapacity.."
§709.2104 requires inclusion of certain words in a durable Power of Attorney.[12]
§709.2104 states:-
..a Power of Attorney is durable if it contains the words: “This durable power of attorney is not terminated by subsequent incapacity of the principal except as provided in Chapter 709, Florida Statutes,” or similar words that show the principal's intent that the authority conferred is exercisable notwithstanding the principal's subsequent incapacity.”
In New York, Illinois & Pennsylvania no provisions require a durable Power of Attorney to contain certain words:
in New York a Power of Attorney is durable unless it expressly provides that it is terminated upon the principal losing capacity and so, care is required to ensure that the wording of any durable Power of Attorney does not fall afoul of this requirement (§5-1501A)
in Illinois a Power of Attorney continues until the death of the principal notwithstanding their disability or incapacity (§2-5)
in Pennsylvania all Powers of Attorney are presumed durable unless they provide otherwise, which is to be read in conjunction with the following extract from the Important Information For The Agent found in §5601 which states “..[y]our agent may exercise the powers given here throughout your lifetime, even after you become incapacitated, unless you expressly limit the duration of these powers or you revoke these powers or a court acting on your behalf terminates your agent's authority.." (§5601.1)
In Texas, a durable Power of Attorney[13] must be executed before someone authorized to take acknowledgements or oaths(§751.0021).[14]
In California, the signature of a principal who is a person[15] may either be acknowledged before a notary public or signed by at least two witnesses who satisfy certain requirements (§4121 & §4122).
The 1994 California Law Revision Commission Report which led to enactment of Division 4.5 of the Probate Code usefully observed:
"The witnessing or acknowledgment requirement is intended to provide a protective level of formality for durable powers of attorney. Acknowledgment before a notary public is needed to facilitate recording a power of attorney in transactions affecting real property.[16] The principal is given the alternative of witnessing in the interest of flexibility, and in recognition of the fact that a notary is not needed if a power of attorney does not pertain to real property and in some situations may not be available.."
(As to §4122) "Nothing in this section affects the requirements concerning recordable instruments. A power of attorney legally sufficient as a grant of authority under this division must satisfy the general rules concerning recordation in Civil Code Sections 1169-1231. To facilitate recordation of a power of attorney granting authority concerning real property, the power of attorney should be acknowledged before a notary, whether or not it is witnessed.."
In New York, the signature of a principal who is a person[17] must be acknowledged in the manner prescribed for the acknowledgment of a conveyance of real property and witnessed by two persons who are not agents (§5-1501B).
Florida and Illinois require a principal[18] who is a person to have their signature both witnessed and acknowledged before a notary public, although:-
These requirements are identified in more detail, including legislative references in the Execution & Other Requirements Summary Table.
As recognized in the legislation of California (§4121) and Illinois (§3-3), an acknowledgement is often in the form of a separate document, being perhaps supplied by the notary public providing the acknowledgement.
In Illinois,[20] there are express limitations upon the relationship between a potential notary public and the principal (see §3-3.6, cited below under the heading ‘Witnesses’).
Witnesses to the signing of a Power of Attorney by a principal are expected to be competent adults, as expressly recognized in the legislation of California and Pennsylvania.
It would likely be in the interests of a principal, their agents and the witnesses, to ensure that the witnesses are not agents appointed under the Power of Attorney or otherwise capable of benefitting from the creation of the Power of Attorney.
Adults in middle years seem most suitable as witnesses, being likely to available to give evidence of witnessing the execution of the Power of Attorney for some time into the future. Generally speaking, middle-aged professionals, such as lawyers or accountants for example, might be good witnesses.
In Illinois, the position is expressly addressed in §3-3.6 which states:-
".. every property power shall bear the signature of a witness to the signing of the agency and shall be notarized. None of the following may serve as a witness to the signing of a property power or as a notary public notarizing the property power:
(1) the attending physician or mental health service provider of the principal, or a relative of the physician or provider;
(2) an owner, operator, or relative of an owner or operator of a health care facility in which the principal is a patient or resident;
(3) a parent, sibling, or descendant, or the spouse of a parent, sibling, or descendant, of either the principal or any agent or successor agent, regardless of whether the relationship is by blood, marriage, or adoption;
(4) an agent or successor agent for property.
(b) The prohibition on the operator of a health care facility from serving as a witness shall extend to directors and executive officers of an operator that is a corporate entity but not other employees of the operator."
Of course, in states like Texas where a durable Power of Attorney must be witnessed before a notary public, there is no reason to consider lay witnesses,
By contrast, in New York for example, where a Power of Attorney must be acknowledged before a notary public (or similar) and two lay witnesses, these comments above are more pertinent.
In California, Texas,[21] New York and Pennyslvania, if a principal cannot sign a Power of Attorney,[22] a person may sign a Power of Attorney[23] on behalf of the principal:
In Florida, the only person who may sign a Power of Attorney[27] on behalf of a principal being a person is the notary public before whom the oath or acknowledgement is made.
Illinois is the only state in which legislation does not recognize the right of a principal being a person to have their Power of Attorney[28] signed on their behalf by another person, accepting that:-
Three (3) of the Six (6) Greater States impose font size requirements:-
A Power of Attorney[31] typically needs to satisfy certain requirements before it can be filed in the land titles agency of a particular state.
If for example, execution and witnessing requirements in a given state are not satisfied, it may be rejected.[32]
In some states, a Power of Attorney can be filed with the Court that hears cases involving management of the affairs of persons who are incapacitated.
There is reference for example, to filing of Powers of Attorney in the legislation of California, Texas and Pennsylvania:-
| California | The §4128 notice provides that a durable Power of Attorney that may affect real property should be acknowledged before a notary public so that it may "easily be recorded" |
| Texas | §751.151 provides: "A durable power of attorney for a real property transaction requiring the execution and delivery of an instrument that is to be recorded, including a release, assignment, satisfaction, mortgage, including a reverse mortgage, security agreement, deed of trust, encumbrance, deed of conveyance, oil, gas, or other mineral lease, memorandum of a lease, lien, including a home equity lien, or other claim or right to real property, must be recorded in the office of the county clerk of the county in which the property is located not later than the 30th day after the date the instrument is filed for recording." |
| Florida | §709.2106 provides: "An original of a properly executed power of attorney may be presented to the clerk of the circuit court for recording in the official records as provided under s. 28.222 upon payment of the service charge as provided under s. 28.24." |
| Pennsylvania | §5602(c) provides: "An originally executed power of attorney may be filed with the clerk of the orphans' court division of the court of common pleas in the county in which the principal resides, and, if it is acknowledged, it may be recorded in the office for the recording of deeds of the county of the principal's residence and of each county in which real property to be affected by an exercise of the power is located. A power of attorney executed in electronic form may be recorded in the same manner as a document subject to the act of July 5, 2012 (P.L.935, No.100), known as the Uniform Real Property Electronic Recording Act. The clerk of the orphans' court division or any office for the recording of deeds with whom the power has been filed may, upon request, issue certified copies of the power of attorney. Each such certified copy shall have the same validity and the same force and effect as if it were the original, and it may be filed of record in any other office of this Commonwealth (including, without limitation, the clerk of the orphans' court division or the office for the recording of deeds) as if it were the original." |
Unlike Powers of Attorney for persons, in the Six (6) Greater States Powers of Attorney for commercial entities such as limited liability companies (LLC), limited liability partnerships (LLP), trusts, corporations or associations are not governed by specific legislation.
Legislation relating to Powers of Attorney for persons typically is expressed in terms that makes clear that it does not apply to Powers of Attorney for commercial entities.
Consequently, Powers of Attorney for commercial entities are not subject to mandatory requirements imposed by legislation.
Commercial entities are subject to non-legislative requirements when creating a Power of Attorney and for example, certain legislative Powers of Attorney may have specific requirements.
When creating a Power of Attorney for a commercial entity, it is important to consider:-
A more detailed explanation of these considerations is under the heading Creation of a Power of Attorney By a Commercial Entity Involves Special Considerations.
Being not Powers of Attorney excluded from the ambit of the legislation - click here to read more. ↩︎
Ibid. ↩︎
Ibid. ↩︎
Being Powers of Attorney that are not excluded from the ambit of the legislation - click here to read more. ↩︎
Being a Power of Attorney for a person that is not excluded from the ambit of the legislation - click here to read more. ↩︎
Found in their constituting documents read in conjunction with common law. ↩︎
Ibid. ↩︎
Being not Powers of Attorney excluded from the ambit of the legislation - click here to read more. ↩︎
Being a Power of Attorney for a person that is not excluded from the ambit of the legislation - click here to read more. ↩︎
Other requirements may also apply, dealing with inclusion of specific words, font size and similar. ↩︎
Ibid. ↩︎
Ibid. ↩︎
This requirement does not apply to non-durable Powers of Attorney because the legislation. ↩︎
Being a principal in respect of a Power of Attorney that is not excluded from the ambit of the legislation - click here to read more. ↩︎
Ibid. ↩︎
In respect of a Power of Attorney not excluded from the ambit of the legislation - click here to read more. ↩︎
Requiring acknowledgement and at least one witness, who cannot be the notary before whom the acknowledgement is given (§3-3). ↩︎
In respect of a Power of Attorney not excluded from the ambit of the legislation - click here to read more. ↩︎
In respect of a durable Power of Attorney only (in Texas in respect of a non-durable Power of Attorney for which there are no legislative requirements, it would be a question for lawyers whether for example, a non-durable Power of Attorney created by a principal who directed another person to sign the Power of Attorney on their behalf would be binding). ↩︎
Being not a Power of Attorney excluded from the ambit of the legislation - click here to read more. ↩︎
Ibid. ↩︎
See earlier footnote. ↩︎
Being not a Power of Attorney excluded from the ambit of the legislation - click here to read more. ↩︎
Ibid. ↩︎
Ibid. ↩︎
Ibid. ↩︎
Being a Power of Attorney for a person that is not excluded from the ambit of the legislation - click here to read more. ↩︎
Ibid. ↩︎
Ibid. ↩︎
For example, in California a Power of Attorney (being not a Power of Attorney excluded from the ambit of the legislation - click here to read more) may be executed before two witnesses without a notary public and so, if a real property transaction in another state, let's say New York, needs to be registered in reliance upon the Power of Attorney, it may not be accepted in New York if the filed records must be executed before a notary public (notwithstanding any reciprocal legislation). ↩︎