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What’s Going On with Power of Attorney Laws in NC?


Did you know that there’s a new power of attorney law in NC? Unless you’re already involved in the legal landscape in some way, probably not—at least until now. Nonetheless, the North Carolina Uniform Power of Attorney Act went into effect on January 1, 2018, and while the new law includes several changes, it all boils down to one important thing for you—you need to replace your old power of attorney.

Why did the Statutory Durable Power of Attorney in NC need to change?

In case you need a refresher, a power of attorney is a legal agreement that allows someone else (the agent) to act on your (the principal’s) behalf. State laws dictate how a power of attorney is executed with the intention of ensuring your agent has the necessary power to function as a substitute “you,” while also ensuring that your agent doesn’t abuse their power or take advantage of the real “you.”

If you don’t yet have a durable power of attorney, you need one—period. Should you ever become incapacitated, a durable power of attorney ensures someone you trust can act on your behalf and helps avoid the often fraught, expensive process of having the courts assign you a guardian.

A consistent thorn in the heels of both estate planning lawyers and their clients has been a lack of clarity and consistency in previous power of attorney laws in NC, which have made it more difficult to protect principals from financial abuse by their agent while at the same time making it difficult in many situations for an agent to execute their authority. The cryptic nature of the law also presented problems for third parties, such as financial institutions, who need to verify powers of attorney before allowing an agent to sign for a property sale or transfer of money.

To remedy these situations, North Carolina adopted a modified version the Uniform Power of Attorney Act, or UPOAA, a more straightforward piece of legislation that many other states have been using for years. As an Asheville estate planning lawyer, this new law is a breath of fresh air. It simplifies, clarifies, and strengthens the durable power of attorney for my clients while also closing loopholes that led to widespread misuse.

It also eliminates the need for a power of attorney to be recorded with the Register of Deeds to keep it effective (i.e. durable) should you become incapacitated—which is exactly when you are most likely to need it! Under the new law, your durable power of attorney is automatically durable and no longer needs to be recorded (except in real estate transactions).

In case you are wondering, the new law affects durable powers of attorney, but laws surrounding healthcare powers of attorney remain unchanged. You can read more about what’s different in the new law here.

Why do I need to update my power of attorney?

First, if you don’t yet have a durable power of attorney, you need one. Period. No one likes to think about becoming incapacitated, but in reality it can happen at any time. If and when it does, you want a person you trust acting on your behalf. A durable power of attorney provides that for you, and helps you avoid the potentially fraught and expensive process of having your family and/or the courts assign you a guardian.

If you currently have a durable power of attorney in place, updating it under the new North Carolina UPOAA format ensures that you and your loved ones are protected. Plus, it gives your estate planning team a chance to make sure your estate documents continue to meet your needs and work in your best interest. Updating your durable power of attorney generally involves completing a few forms.

Need to update your Asheville power of attorney? We can help.

It’s best not to find out the hard way how changes in estate planning laws affect you or your loved ones. Whether you need to update your durable power of attorney, or you need to establish one for the first time, our experienced legal team at Craig Associates, PC is here to help. Please call 828-258-2888 or contact us here to request a consultation.

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