Powers of Attorney

by Jim Slaughter

Updated from "Power of Attorney Provides Comfort" in The Business Weekly of the Greensboro News & Record

Who would manage your banking and business affairs if a sudden illness or accident left you incapacitated? Your family could ask a court to appoint a guardian to make such decisions for you. But wouldn't you prefer to choose who manages your affairs in the event of a crisis?

Power of Attorney

A power of attorney is a written document that gives another person the authority to act on your behalf. The person signing the document, or "principal," appoints another person as an agent. The agent is also called an "attorney-in-fact," which is different than an attorney at law.

A power of attorney can give either broad or limited powers to the attorney-in-fact. For example, a limited power of attorney might be drafted to allow a wife to sign legal documents for her husband while he is out of town. A power of attorney can also be designed to survive the incapacity or mental incompetence of the principal.

North Carolina has specific statutes that govern written powers of attorney. These statutes provide that no "magic" language or "legalese" is required to create a valid power of attorney, and that a variety of wording or form may be used. However, since specific language is given in the statute, the safest course is to use that express language.

The statutory power of attorney in North Carolina states that the powers granted to the attorney-in-fact are "broad and sweeping." The statute confers at least the following powers to the attorney-in-fact:

  • To lease, purchase, exchange, and acquire real property.
  • To lease, purchase, exchange, and acquire personal property.
  • To bond, share, and commodity transactions.
  • To make banking transactions.
  • To have access to safe deposit boxes and vaults.
  • To conduct any business operating transactions.
  • To exercise or perform insurance transactions.
  • To do all acts necessary for maintaining the customary standard of living of the principal.
  • To prepare any social security or unemployment insurance documents.
  • To execute vouchers for military service benefits.
  • To prepare any and all types of tax returns and documents.
  • To employ agents such as legal counsel, accountants, or other professionals.

A regular power of attorney is no longer effective if the principal becomes incapacitated or mentally incompetent. In addition, powers of attorney terminate at the death of the principal. A power of attorney can also be restricted by language that the power terminates on a specific date.

Durable Power of Attorney

A durable power of attorney must include language indicating that the power of attorney will not be affected by the subsequent incapacity or mental incompetence of the principal. Unlike a regular power of attorney, a durable power of attorney must be filed with the Register of Deeds (and in some instances, with the Clerk of Superior Court) to be effective. However, the power of attorney can be filed after the principal becomes incapacitated or mentally incompetent. As a result, durable powers of attorney are sometimes prepared but not filed until needed later. The attorney-in-fact of a durable power of attorney must keep full and accurate records of all transactions on behalf of the incapacitated or mentally incompetent principal.


Any standard or durable power of attorney can contain provisions relating to appointment, resignation, removal and substitution of the attorney-in-fact. The easiest way to terminate an unrecorded power of attorney is to destroy all copies. If the power of attorney has been recorded with the Register of Deeds, an instrument of revocation must be executed and filed. A durable power of attorney also terminates if all attorneys-in-fact named in the instrument or substituted die, or become incapable of acting.

In addition to standard and durable powers of attorney, North Carolina statutes provide for health care powers of attorney. Such an instrument authorizes another person to make decisions on giving, withholding, or withdrawing consent to medical treatment for a principal. Health care powers of attorney are discussed in a separate article.

Like wills, powers of attorney are important documents that most individuals should have. Although usually short and simple, the great power of such a document should not be overlooked. A recent Wall Street Journal article noted that a power of attorney given to the wrong person is "a license to steal." Make certain that the person you select as attorney-in-fact can be trusted with your possessions and to act in your best interests.

Articles are intended to provide general information and are not legal advice or a legal opinion. Specific questions should be directed to an attorney at Law Firm Carolinas or to another lawyer.

Professionalism at all levels is our hallmark.