14 Dec North Carolina Legislative Update
The North Carolina legislature recently enacted the North Carolina Uniform Power of Attorney Act (the “Act”), effective January 1, 2018.
North Carolina Senate Bill 569
The following definitions, among others, are applicable to a power of attorney:
“Agent” means a person granted authority to act for a principal under a power of attorney, whether denominated as agent, attorney-in-fact, or otherwise. The term includes an original agent, coagent, successor agent, and a person to whom an agent’s authority is delegated.
“Durable” (with respect to a power of attorney) means the incapacity of the principal does not terminate the power of attorney.
“Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
“Incapacity” means inability of an individual to manage property or business affairs because the individual has any of the following statuses:
- An impairment in the ability to receive and evaluate information or make or communicate decisions even with the use of technological assistance; or
- Is missing, detained (including incarcerated in a penal system), or outside the U.S. and unable to return.
“Power of Attorney” means a writing or other record that grants authority to an agent to act in the place of the principal, whether or not the term “power of attorney” is used.
“Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
“Sign” means, with present intent to authenticate or adopt a record:
- To execute or adopt a tangible symbol; or
- To attach to or logically associate with the record an electronic sound, symbol, or process.
A power of attorney created under the Act is durable unless it expressly provides that it is terminated by the incapacity of the principal.
A power of attorney must be (i) signed by the principal or in the principal’s conscious presence by another individual directed by the principal to sign the principal’s name and (ii) acknowledged.
Except as otherwise provided in the power of attorney or by law, a photocopy or electronically transmitted copy of an original power of attorney has the same effect as the original.
A power of attorney terminates when any of the following occur:
- The principal dies;
- The principal becomes incapacitated, if it is not durable;
- The principal revokes it;
- It provides that it terminates;
- The purpose of the power of attorney is accomplished;
- The principal revokes the agent’s authority or the agent dies, becomes incapacitated, or resigns, and the power of attorney does not provide for another agent to act; or
- A guardian of the principal’s estate or general guardian terminates the authority.
The execution of a power of attorney does not revoke a power of attorney previously executed by the principal unless the subsequent power of attorney provides that the previous one is revoked or that all other powers of attorney are revoked.
A principal may revoke a power of attorney in one of the following manners:
- If the power of attorney has been registered in an office of the register of deeds in North Carolina, it must be revoked by registration in that office by an instrument of revocation executed and acknowledged by the principal while the principal is not incapacitated with proof of service on the agent in the manner prescribed under North Carolina Rules of Civil Procedure.
- If the power of attorney has not been registered in an office of the register of deeds, it may be revoked by one of the following methods:
- A subsequent written revocatory document executed and acknowledged while not incapacitated;
- Being burnt, torn, canceled, obliterated, or destroyed, with the intent and for the purpose of revoking it, by the principal or by another person in the principal’s presence and at the principal’s direction while the principal is not incapacitated.
A principal may designate 2 or more persons to act as coagents. A principal may expressly require in the power of attorney that coagents act jointly. If a principal does not expressly require that coagents act jointly, each coagent may exercise the coagents’ authority independently without the knowledge, consent, or joinder of any other coagent or coagents. Unless the power of attorney otherwise provides and if any one or more coagents resigns, dies, becomes incapacitated, or otherwise fails to act, the remaining agent or coagents may continue to act.
Except as otherwise provided in the power of attorney, a person accepts appointment as an agent under a power of attorney by exercising authority or performing duties as an agent or by any other assertion or conduct indicating acceptance.
The Act sets forth the agent’s duties and liabilities, and sets forth the method that an agent may resign.
A person that is asked to accept an acknowledged power of attorney may request, and rely upon, without further investigation:
- An agent’s certification, as described in the Act;
- An English translation of the power of attorney if the power of attorney contains in whole or in part, language other than English; and
- An opinion of counsel as to any matter of law concerning the power of attorney if the person making the request provides in a writing or other record the reason for the request.
An English translation or an opinion of counsel requested under this section must be provided at the principal’s expense unless the request is made more than 7 business days after the power of attorney is presented for acceptance.
A person is not required to accept, and is not liable for refusing to accept, a power of attorney that has not been duly acknowledged. Except as provided below:
- No later than 7 business days after presentation of an acknowledged power of attorney for acceptance, a person must (i) accept the power of attorney; (ii) refuse to accept the power of attorney (as described hereinafter); or (iii) request a certification, a translation, or an opinion of counsel.
- If a person requests a certification, a translation, or an opinion of counsel, then within 5 business days after receipt of the requested items in reasonably satisfactory form, the person shall either (i) accept the power of attorney or (ii) refuse to accept the power of attorney (as described hereinafter).
- A person may not require an additional or different form of power of attorney if the power of attorney presented reasonably appears to authorize the agent to conduct the business the agent desires to conduct.
A person is not required to accept an acknowledged power of attorney if any of the following circumstances exist:
- The person is not otherwise required to engage in a transaction with the principal in the same circumstances;
- Engaging in a transaction with the agent or the principal in the same circumstances would be inconsistent with applicable federal law;
- The person has actual knowledge of the termination of the agent’s authority or of the power of attorney before exercise of the power;
- A request for a certification, a translation, or an opinion of counsel is refused;
- The person requesting a certification, a translation, or an opinion of counsel does not receive the requested items in reasonably satisfactory form within a reasonable period of time;
- The person in good faith believes that the power is not valid or that the agent does not have the authority to perform the act requested, whether or not a certification, a translation, or an opinion of counsel has been requested or provided;
- The person has reasonable cause to question the authenticity or validity of the power of attorney or the appropriateness of its exercise by the agent;
- The agent or principal has previously breached any agreement with the person, whether in an individual or fiduciary capacity;
- The person makes, or has actual knowledge that another person has made, a report to the appropriate adult protective services or law enforcement agency stating a good faith belief that the principal may be subject to physical or financial abuse, neglect, exploitation, or abandonment by the agent or a person acting for or with the agent.
Without limiting the above, nothing requires a person to do any of the following:
- Open an account for a principal at the request of an agent if the principal is not currently a customer of the person;
- Make a loan to the principal at the request of the agent;
- Permit an agent to conduct business not authorized by the terms of the power of attorney, or otherwise not permitted by applicable statute or regulation.
A person that refuses in violation of the above to accept an acknowledged power of attorney is subject to all of the following:
- A court order mandating acceptance of the power of attorney;
- Liability for reasonable attorney’s fees and costs incurred in any action or proceeding that mandates acceptance of the power of attorney;
- Any other remedy available under applicable law.
The Act sets forth the authorities that the agent can exercise in general and those that must be specifically authorized in the power of attorney. The Act provides a detailed definition for certain words or phrases in a power of attorney grant of authority for:
- Real Property
- Tangible Personal Property
- Stocks and Bonds
- Commodities and Options
- Banks and Other Financial Institutions
- Operation of Entity
- 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
The Act sets forth a statutory form that may be used (but is not mandatory) in order to create a valid power of attorney, as well as a form for agent’s certification as to the validity of a power of attorney.
The Act also sets forth a statutory form of a Limited Power of Attorney for Real Property, which can be used for transactions involving the purchase, sale, or financing of real property or tangible personal property related to real property.