If you want someone to be able to deposit your checks at your bank, file your taxes, or even sell or mortgage your home, you can create a handy document called a power of attorney. A POA is a simple document that grants specific powers to someone you trust—called an "agent" or "attorney-in-fact"—to handle certain matters for you.
You can make several different types of POAs in Delaware. In particular, many estate plans include two POAs:
In most estate plans, these POAs are what are known as "durable" POAs, which means that they retain their effectiveness even after you're incapacitated. It's a good idea for most people to create these two documents, as they help plan for the unexpected.
To learn about other types of POAs, including non-durable (limited) and springing POAs, see What Is a Power of Attorney. Below, learn how to create a durable financial POA that is valid in Delaware.
For your POA to be valid in Delaware, it must meet certain requirements.
The person making a power of attorney must be of sound mind. The exact contours of this mental capacity requirement are open to interpretation by Delaware courts. If you're helping someone make a POA and have questions about the person's mental capacity, you should consult an attorney.
To make a POA in Delaware, you must sign in the presence of both a notary public and a witness. The witness must be:
Del. Code § 49A-105.
While it's not strictly required, it's best to include a signed notice at the beginning of your POA. This notice helps ensure that you understand what you're doing when you create a POA and give away powers to an agent. The exact language for this notice is set out in Delaware's statute. (See Del. Code § 49A-105.) If there's no signed notice and a third party (like a bank) takes issue with your agent's authority to act for you, your agent will have to take extra steps to prove your POA is valid.
Delaware offers a statutory form (a form drafted by the state legislature) with blanks that you can fill out to create your POA. For a more user-friendly experience, you can try a software program like WillMaker, which guides you through a series of questions to arrive at a POA that meets your specific aims and is valid in your state. You can also hire a Delaware lawyer to create a POA for you. Many lawyers will include durable POAs as part of a more comprehensive estate plan alongside a will or living trust.
Whatever method you choose, the process of making the POA will include selecting (or initialing), from a list, each specific power you want your agent to have. These powers might include, for example, the power to act in the following categories:
In Delaware, if you want the power of attorney to be durable (so that it remains effective after your incapacitation), the document must explicitly state so. Delaware's power of attorney statute suggests wording such as "This power of attorney shall not be affected by the subsequent incapacity of the principal." (Del. Code § 49A-104.)
As mentioned above, you can't simply sign the document and call it a day. In Delaware, you must notarize the POA and have it witnessed by someone who fits the requirements set out in Delaware law. (See above.)
Once you have completed the POA, store the original in a safe place that your loved ones can easily access, and let them know where to find it. (It won't do much good locked away in a safe that no one can get into.) If you become incapacitated, your attorney-in-fact might need the original POA to act on your behalf.
You should also give a copy of the power of attorney to your attorney-in-fact so that your attorney-in-fact is familiar with the contents of the document.
If you granted the power to deal with real estate to your attorney-in-fact, you should also file a copy of your POA in the land records office (called the recorder of deeds in Delaware) in the county where you own real estate. This will allow the recorder of deeds to recognize your attorney-in-fact's authority if your attorney-in-fact ever needs to sell, mortgage, or transfer real estate for you.
You can also give copies of your durable financial POA to banks or other institutions that your agent might need to deal with in the future. This step might eliminate some hassles for your agent if your agent ever needs to use the POA. Banks can sometimes be finicky about accepting POAs; see Can Banks Refuse a Power of Attorney? for more details.
It's also worth noting that Delaware requires an attorney-in-fact or agent to sign a specific statement, called an "agent's certification," before the attorney-in-fact starts exercising the powers granted in the POA. The exact words of this statement are set out in Delaware's statute. The attorney-in-fact essentially promises to do only what's allowed by the POA, keep records of transactions, and act in good faith.
Legally speaking, you can name any competent adult to serve as your attorney-in-fact. But you'll want to take into account certain practical considerations, such as the person's trustworthiness and geographical location. For more on choosing attorneys-in-fact, see What Is a Power of Attorney.
Naming a "successor" attorney-in-fact—an alternate who will become your attorney-in-fact if your first choice is unavailable for any reason—is always a good idea, as it creates a backup plan.
Your POA should state when it takes effect. It's very common for the POA to become effective immediately.
In Delaware, it's also possible to create a condition that must be satisfied before the POA becomes effective—such as a doctor declaring that you are incapacitated—but there are many reasons why this type of "springing" power of attorney is not usually advised.
Any power of attorney automatically ends at your death. A durable POA also ends if:
Additionally, in Delaware, if your spouse is named as your agent in your POA, that designation automatically ends if you or your spouse files for divorce. To be clear, your ex-spouse's authority to act as your agent ends, but your POA is still intact. So if you named a successor agent, that person would become your agent instead.
For more on Delaware estate planning issues, see our section on Delaware Estate Planning.