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KASS: Choose power of attorney carefully

DEAR BENNY: We plan on buying a condo, but my husband travels a lot and may not be able to sign any of the necessary documents required in this transaction. Any suggestions? – Jessica

DEAR JESSICA: If your husband will have access to the internet, he will be able to sign all documents electronically. However, as a safeguard, he should give you a power of attorney. This will authorize you to act on his behalf and sign all of the relevant legal documents.

The giver of the power of attorney is called the principal. The receiver is generally called the “attorney in fact.”

There are two types of powers of attorney:

*General: The principal authorizes the attorney in fact to take any and all actions as if the principal was taking them himself. This is also known as a durable power of attorney. Your state law may have specific requirements in order to sell real property by way of a power of attorney. Some states will not permit real estate to be conveyed by such a general power of attorney.

*Specific: The principal gives specific information and instructions to the attorney in fact. For example, sell my house located at 123 ABC Street; or, write a $1,000 check to my insurance company from my bank account. The specific instructions are contained in the legal document, and the attorney in fact has no authority to exceed those instructions.

Your lawyer should be consulted so that you fully understand the consequences of your actions.

A power of attorney gives someone else the right to sell your house, and you want to make sure you are not giving away the store. Certainly, there should be no problems between husband and wife. But in my career, I have represented a number of clients who lost their home because they gave a power of attorney to someone they thought was a friend.

DEAR BENNY: Our homeowners association by-laws state that the annual meeting of the members shall be held in the month of February at such time and place as shall be determined by the board of directors. If our meeting was held March, was that a legal meeting? – Johnnie

DEAR JOHNNIE: I would have to review your bylaws. Generally, those legal documents give the board some leeway. But regardless, if there was a meeting in March, and (1) it was properly noticed, and (2) there was a quorum based on actual attendance and valid proxies, I would consider the meeting valid and legal.

Unless owners can claim they were damaged financially by the change in the date, I cannot see any judge holding that the March meeting was invalid. I have always followed the “no harm, no foul” rule, and this seems to fall within that rule.

DEAR BENNY: I live in a county where seniors receive a 5 percent reduction in their real estate tax. I just turned 65, my wife is seven years younger and our house is titled in her name only (second marriage).

If she were to agree to add my name on the deed, can we enjoy the senior real estate tax deduction while still protecting her full legal interest in the house ? Is there a supplemental document that protects her full interest in the home, or does the deed override all other riders? – Bruce

DEAR BRUCE: I believe this is state-specific, so I can only give you a general response. In the District of Columbia, for example, where I practice law, the senior tax deductions will be available under your scenario so long as one of the owners has at least a 50 percent interest in the property. And of course you have to meet all other requirements to be eligible, such as income caps.

If you and your wife will own the property as tenants by the entirety, on the death of one party the property will vest by operation of law into the survivor. But if your wife, for example, wanted to sell the house or give it as a gift to children of her prior marriage, you both would need to enter into a covenant spelling out what rights she would have under those circumstances.  This document will be recorded among the land records in the jurisdiction where the property is located.

If you decide to put title in both of your names, please consult an attorney first. There may be some tax implications involved.

 

Benny Kass is a practicing attorney in Washington, D.C. and in Maryland. He is not providing specific legal or financial advice to any reader. He wants readers to e-mail him, but cannot guarantee a personal response. He can be reached at: mailbag@kmklawyers.com.

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