How a Durable Power of Attorney Works for a Home Deed—And How to Create the POA in 8 Steps

Have you thought about estate planning and your home? One tool you should know about is the durable power of attorney. A durable POA can help a senior deed holder manage property and money, even when they’re losing the ability to do this personally.

The document names your agent(s) and lays out their continuing authority to handle your transactions, including transferring your home deed to a new owner. If you use a POA to designate another person as your agent, that person can list your home for sale with a real estate agent, accept an offer, and sign financial documents.

Here, we explore the meaning of assigning a POA role for decisions about your home.

Step by Step: Tips for Creating a Durable Power of Attorney

To create a durable POA:

STEP 1. First, speak with your accountant.

Advice from your financial adviser or tax expert about your decision to create a POA can spare you from common blunders (such as authorizing your agent to transfer a gift deed, if in your particular case using a will could have been a better tax decision).

STEP 2. Choose a trustworthy person as your authorized agent. 

You’ll assign the POA role to your trusted authorized agent. See the section below, Who Makes the Best Authorized Agent for a Durable POA?, to review the traits to look for when choosing a person to represent you in future deed transactions.

Clearly explain the limits of your authorized agent to sell, buy, manage, or finance a particular property — or all property you own. You’ll write your agent’s powers (and any limits on those powers) into your POA and initial each power when you sign the document for recording.

STEP 3. Draft your document.

Be sure to identify the property you’re buying or selling with the address, plus the legal description (the same as on your current deed).

Note that states regulate the power of attorney. Some, for example, expect the POA to affirm that the authorized agent has accepted the role. Some say the notary doesn’t count as a witness. (Check out the Texas durable power of attorney to see a state form).

Be sure the title company knows you’re creating a POA. Your title company may offer state POA forms. 

STEP 4. Meet with a lawyer.

Both you and your authorized agent will meet with the lawyer who can draft or review your document, check for ambiguous language and help you make clarifications. An estate planning lawyer offers guidance to suit your own financial and personal circumstances, and follows state rules. For instance, your lawyer can tell you if a state requires lenders to request medical declarations of incapacitation before working with a POA.

STEP 5. Sign and record the POA.

As the principal of the POA, you should sign the document together with your authorized agent and witnesses. Notarize the document, carefully following the home state’s requirements. Have your document recorded in the county where the home is.

STEP 6. Give your agent access to the executed POA.

Your agent will use the original when the time comes for a deed transfer.

With access to the original POA document, your authorized agent can talk with real estate professionals about carrying out a transaction on your behalf.

Durable, or springing? Only use a springing power of attorney if you expect certain things to happen (for example, you are medically declared incapacitated) before your agent is allowed to act for you.

STEP 7. Have your POA agent communicate with your real estate professional.

You POA agent needs to handle a future transaction together with a real estate agent. Let your POA agent know how this will work. A real estate professional who works with an authorized agent on a real estate transaction should always call the title company and have a legal expert review the POA. A lapse here can create years-long court disputes about whether your deed transfer was legitimate.

Avoid the appearance of unfair dealing! A POA agent should sell a home for its market value. Do you plan to allow your agent to receive anything of value? If so, the POA document should say so.

STEP 8. Carry out the POA.

Your agent will sign off on the transaction by writing “X acting as agent for” you, or “by X under POA for” your name on the deed. And the deed is done!

The deed transfers the title. The durable POA document accompanies the deed for recording. Here again, recording the POA might require the use of a state-issued form.

Who Makes the Best Authorized Agent for a Durable POA?

How do you choose your representative? You might think of the person closest to you, but that’s not necessarily your best choice.

Pick someone who:

• Lives near your real estate.

• Can handle (and communicate effectively throughout) time-consuming and sometimes stressful paperwork requirements.

• Is most likely to follow your directions and act wisely on your behalf when choices need to be made.

• Can work effectively with financial, real estate, and medical professionals.

• Is courteous, yet can be appropriately assertive, when dealing with others.

• Has a good sense of detail and organization.

Name an agent who fully understands, and agrees to carry out, the tasks ahead on your behalf. And although it may go without saying, your POA agent should be thoroughly trustworthy.

Can You Decide to End Your Agent’s Authority?

A durable power of attorney is, well, durable. In contrast to a non-durable POA, the durable POA goes into effect once you assign authority to your agent and stays effective if you become unable to make your own real estate decisions.

But before the time you lose that ability, yes. You may revoke (or change) a durable POA, using a power of attorney revocation form. Tell the agent you selected about your new decision — in writing. (State law might require this.)

The durable power to represent you ends automatically upon your death. Assuming you have a last will, the local probate court will assign the executor named in your will to manage your business from there.

No Time Like the Present

You have to have the legal capacity to sign contracts when you create and sign a durable power of attorney. So consider this option now, not later.

Once you’re unable to make legally binding decisions, you won’t be legally able to grant POA authority to an agent on your behalf.