Power of Attorney: North Carolina Requirements, Types, and Uses

What is a power of attorney?

An NC power of attorney is a legal document that gives one person, called the "agent" or "attorney-in-fact," the power to take certain actions on behalf of another person, called the "principal." This can be very useful if the principal can't be present to sign legal documents, or wants to assure that financial matters and healthcare can be taken care of in the event that they become incapacitated.

What a power of attorney can do

A POA’s scope is defined in the document’s terms. Generally speaking, a power of attorney allows an agent to perform the following types of tasks on your behalf:

• Pay bills
• Sell or transfer a specific property
• Access bank account or safe deposit box
• Communicate medical preferences to healthcare providers
• File taxes 
• Represent you in court

What a power of attorney can't do

A North Carolina power of attorney isn't a free wand that allows the agent to do anything. The agent can’t do the following:

• Act against your best interests
• Make decisions before the POA goes into effect
• Override or make changes to a will
• Go beyond the scope and powers granted in the POA
• Transfer their powers to another party
• Engage in illegal acts that break the law

Depending on the type of POA, the powers established may lapse due to the principal's death, revocation, or court's invalidation. 

Types of powers of attorney

The state of North Carolina recognizes a few different types of power of attorney so long as the agreement falls within state law.

Financial power of attorney

A financial power of attorney document limits the attorney-in-fact's power to financial matters such as filing taxes, paying bills, and managing your estate. A financial POA can go into effect immediately or be a "springing" POA, which gives your agent the power to act only if you become incapacitated or mentally incompetent.

Medical power of attorney

A medical or healthcare POA gives your agent the power to make medical treatment decisions for you, but only if you are physically or mentally incapable of making your own decisions. A healthcare POA includes specific provisions related to particular types of healthcare decisions, including nutrition, mental health, and organ donation. This type of POA ensures that future medical decisions truly reflect your values and preferences. A medical POA is typically included in an advance healthcare directive.

Durable power of attorney

A durable POA continues to remain in effect even after the principal becomes incapacitated. In NC, all powers of attorney, unless explicitly stated, are considered durable (N.C. Gen. Stat. § 32C-1-104).

Incapacity is defined as the inability to manage property or business affairs because the principal "has 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 United States and unable to return."

Limited power of attorney

This limited or special POA grants very specific powers to the agent—often to complete a particular task or for a certain time frame. For instance, if you're going to be out of the country for six months, you can use a limited power of attorney to allow an agent to pay your bills for that specific time period.

What forms are needed to get a North Carolina power of attorney?

North Carolina law provides POA forms and templates that may be used if they suit your requirements. You can also use these forms as a basis to create your own customized POA.

• Statutory short form power of attorney. This is a financial POA that can be used to establish broad or specific authority to the agent. The form may be found in the North Carolina General Statutes, Chapter 32C, at Section 32C-3-301.
• Statutory form healthcare power of attorney. The North Carolina legislature also created a Health Care Power of Attorney form in 2018. It may be used to grant sweeping and broad powers regarding medical decisions. The form is available under NC General Statutes § 32A-25.1.
• Limited power of attorney for real property. This allows an agent to handle real estate transactions for specifically designated property, for a limited amount of time. A reference form is available under NC General Statues § 32C-3-303.
• Agent's certification as to the validity of power of attorney and agent's authority. This is for an agent to sign to certify that the POA remains valid. Many financial institutions and banks commonly request this form as part of verification of a submitted POA.

If you have a POA that was created before 2018, it would be a good idea to create a new one using one of the current forms.

5 requirements for a NC power of attorney

North Carolina laws have set protocols for what makes a valid and enforceable power of attorney.

Content requirements

All POAs must include the legal names of the principal and appointed agent. It must also specify the powers granted to the attorney-in-fact and the date or triggering condition that sets the POA into effect. If you don't explicitly mention this, the POA is immediately effective.

For instance, if you don't want your statutory short form power of attorney to become effective unless you are incapacitated, the form must be modified in two places.

1. You will need to cross out or delete the seventh paragraph under the heading "IMPORTANT INFORMATION," which states: "This power of attorney becomes effective immediately." 
2. Under the heading "EFFECTIVE DATE," you need to replace the sentence "This power of attorney is effective immediately" with a description of when it will take effect. For example: "This power of attorney shall become effective after I become incapacitated, as certified in writing by my attending physician."

Also, as per North Carolina law, you may state in the POA how incapacity will be determined, as in the example above. If not stated, or if the person designated can't or refuses to make the decision, incapacity will be determined by either two individuals who are physicians or licensed psychologists who have examined the principal; or by a lawyer, judge, or "an appropriate government official."

Agent requirements

As per the North Carolina Uniform Power of Attorney Act, the agent must be above 18 years of age and be mentally competent. Mentally competent means that they understand the nature of their role and fiduciary responsibilities. The agent shows their acceptance of the role through their actions or by signing as “agent.” 

Execution requirements

There are some execution requirements, such as:

• The POA must be a written document. 
• The principal must be of sound mind and be able to understand the nature of the POA.
• The principal must show intent to grant someone the authority.
• The POA must be signed by the principal, and the signature must be acknowledged before a notary public or another person authorized by law to take acknowledgments. If the principal is physically unable to sign, another person may sign the principal's name, but the principal must direct the other person to sign, and that person must sign "in the principal's conscious presence."

Designation of healthcare surrogate

A healthcare surrogate is someone who will make medical decisions on your behalf in case of illness or incapacitation. In NC, a designation of healthcare surrogate form is the same as a medical POA. However, the state has different execution requirements for this kind of POA.

In addition to the principal, the healthcare POA form must be signed by two witnesses. All signatures must be done in the presence of a notary public. The healthcare POA form mentions the requirements for the two witnesses to meet. The two witnesses cannot be:

• Related to you by blood or marriage
• Your heir or a listed beneficiary set receive a portion of your estate in your will
• Someone with a claim filed against you or your estate
• Your doctor or other health care provider of a hospital in which you are a patient or an employee of a nursing home where you live

How to get a power of attorney in North Carolina

While the state does provide POA of attorney forms, you aren't required to use them. If you wish to create a more customized POA, you need to follow the steps below to ensure your document is valid and does what you intend it to do.

• Decide what type of POA you want. Think about what kind of POA you wish to create. An estate lawyer can guide you on which POA suits your overall estate plans (or the situation you’re facing).
• Appoint an agent. A POA gives significant control to another person, so you’ll want to exercise great care in appointing someone to take on the role. While many choose to appoint their spouse or of-age children as their agent, you may wish to consider picking someone who you not only trust but who also has the skill set and time to handle this job. For instance, if you are creating a financial POA, think about whether the selected candidate has the aptitude to make the right business investments. NC laws also allow you to appoint a successor agent who takes over the responsibilities when the primary agent dies or becomes mentally incompetent.
• Create the POA. In addition to the NC standard forms, there are free POA templates available online—but the wording in those templates can be ambiguous or not state-specific, which may be risky. POAs are serious documents and you don't want to give unintended powers to your agent. It's best to work with an experienced attorney or estate planning service to draft this important document.
• Sign and notarize the form. Per N.C. Statutes (N.C. Gen. Stat. § 32C-1-105), your POA must be signed before a notary public.
• Inform relevant parties. Once you have created the POA, inform the relevant parties of your decision. Deliver a copy of the POA to your agent and close family members. We also recommend storing a copy alongside other estate planning documents.
• Register the POA (if required). This step is only necessary if you execute a special power of attorney that deals with real estate property transactions or involves making business decisions on your behalf.

FAQs

Is there a difference between an attorney-in-fact and an agent?

Not in the context of POAs—these words are used interchangeably to describe the person acting on behalf of the principal in a power of attorney.

When should you get a power of attorney?

The best time to get a healthcare or financial power of attorney is well before you need it, but you need to be at least 18 years old to create a POA. By putting these documents in place in advance, you'll be prepared for whatever occurs.

How long does a power of attorney last in North Carolina?

A durable POA loses its power when the principal dies or there's a termination date (which is common in a limited or temporary power of attorney). If the power of attorney isn't durable, it will become invalid when the principal becomes incapacitated (N.C. Gen. Stat. § 32C-1-110). The agent can also lose their authority when the principal revokes the document or when the court invalidates it.

In NC, if your spouse is your agent, their designation and authority automatically ends if you get divorced (unless the POA states otherwise).

How much does it cost to get a power of attorney in North Carolina?

It can cost anywhere between $175–$1,000 to get your power of attorney in North Carolina—a lot depends on case complexity and the attorney’s fees (you should work with one). There also may be additional costs such as notary fees and recording fee, which vary by county. For instance, to record a POA in Wake County costs $26 for the first 15 pages.

Edward A. Haman, Esq. contributed to this article.