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 New Jersey. 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 New Jersey.
For your POA to be valid in New Jersey, 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 New Jersey courts. Generally, the courts have held that you need to be capable of understanding the nature and effect of your act when you make the POA. (In re Estate of Zaolino, 1998 WL 34001287 (N.J. Super. Ct. App. Div. 1998).) If you're helping someone make a POA and you're not sure if they meet the mental capacity requirement, you should consult a lawyer.
To make a power of attorney in New Jersey, you must sign your POA in the presence of a notary public.
Some private companies offer forms or templates with blanks that you can fill out to create your POA. For a more user-friendly experience, try WillMaker, which guides you through a series of questions to arrive at a POA (and estate plan) that meets your specific aims and is valid in your state. You can also hire a New Jersey 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 likely include either granting your agent comprehensive powers or selecting, from a list, the specific powers you want your agent to have. For example, you might choose to grant your agent the power to engage in:
In New Jersey, your POA is not durable by default. To make the POA effective even after your incapacitation, New Jersey laws require a statement such as: "This power of attorney shall not be affected by subsequent disability or incapacity of the principal, or lapse of time." (N.J. Stat. § 46:2B-8.2.)
As mentioned above, you must have your POA notarized.
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 agent so that your agent is familiar with the contents of the document.
If you gave your agent the power to conduct transactions with real estate, you should also file a copy of your POA in the land records office (part of the county clerk's office in New Jersey) in the county or counties where you own real estate. This will allow the recorder of deeds to recognize your agent's authority if your agent 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.
Legally speaking, you can name any competent adult to serve as your agent. But you'll want to take into account certain practical considerations, such as the person's trustworthiness and geographical location. For more on choosing agents, see What Is a Power of Attorney.
New Jersey allows you to appoint co-agents who are authorized to act at the same time, but it's usually advisable to stick to just one agent to minimize potential conflicts. However, naming a "successor" agent—an alternate who will become your agent if your first choice is unavailable for any reason—is always a good idea, as it creates a backup plan.
Your POA is effective immediately unless it explicitly states that it takes effect at a future date.
It's 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:
For more on New Jersey estate planning issues, see our section on New Jersey Estate Planning.