Tips on Using Power of Attorney When Selling a House

alz-checkbook1-300x201.jpgHaving a power of attorney of personal care matters can be valuable in many instances, especially when dealing with a loved one who is mentally or physically incapacitated due to Alzheimer’s, injury, etc. A power of attorney of personal care is necessary for many legal issues that can arise in such situations; one of these is when it becomes necessary to sell a house that is in the name of the loved one.

As with all things related to a power of attorney, it’s important to discuss any issues that arise with a knowledgeable lawyer who has elder care experience. However, following are a few tips which often apply to using a power of attorney when selling a house.

Is it durable? Often a power of attorney of personal care is “durable” — meaning that it cannot be invoked unless the subject in question has been declared legally incompetent. This usually requires that one or more physicians state that they have examined the subject and found him incompetent and a court has ruled likewise. If the power of attorney is durable and there is no legal ruling of incompetence, the house cannot be sold by the agent named in the power of attorney documents. Since many durable powers of attorney are drawn up many years in advance “just in case,” it’s important to follow this procedure before moving forward with any plans.

Limited vs. general. Some powers of attorney are very limited, allowing an agent this power only for a specific purpose — say, for selling a house. If the document is limited, it’s important to check that real estate transactions of this sort are included among its specific terms.
Bank requirements. In some cases, a bank or mortgage lender may have added specific language in a power of attorney related to the sale of a house. Usually this has to do with very specific requirements, such as ensuring that the property will be sold for a particular minimum amount of money.

Protect yourself. In some cases, an outside party may challenge the decision to sell or the terms of the final agreements; this usually happens when it is felt that the outcome was not in the best interests of the incapacitated loved one. It’s a good idea to obtain a signed document from an experienced lawyer or financial planner stating that the final agreement makes appropriate financial sense.

Making sure that a power of attorney of personal care matters is in place can help to make things proceed more smoothly when a loved one becomes unable to make important decisions independently.


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