The purpose of this post is to draw awareness to the common problem of the validity and effectiveness of a power of attorney (“POA”) to deal with a property in a cross-jurisdictional context. For example, is a power of attorney validly created in Canada sufficient to allow one to make decisions pertaining to the registration of land in Florida? The “POA” could be perfectly valid under Canadian law but NOT be sufficient for its intended use in Florida.
The validity of a “POA” where it is created is different from whether it is sufficient to be used in its effective jurisdiction.
Note also that this is a different issue from “Authenticating A Document Created In Canada”.
Q. What if a property is located in another jurisdiction and a POA is needed to deal with that specific property? Will a POA created in Canada or Europe be valid in the United States?
A. Not necessarily!
As one person commented:
I had POA for a family member, took the document to that family member’s bank in the US and they sent us back to get it notarized at the US consulate in Canada.
It makes good sense to create:
1. Separate powers of attorney for different purposes: and
2. A power of attorney in the jurisdiction where the power of attorney is to be used!
“An ounce of prevention is worth a pound of cure!”
Yesterday I participated in an IRS Medic podcast to discuss “Powers Of Attorney” and Americans Abroad.
Generally, a Power Of Attorney is created when an individual grants to an “attorney” the power to act on behalf of the grantor with respect to a particular property or issue. For example, a grantor could grant to an attorney the power to sell or manage a specific property. But, what if that property is outside the the residence or domicile of the grantor? What are the requirements that make a POA valid? Is a POA that is valid under the laws of Ontario, Canada valid in a U.S. state? The short answer is NOT NECESSARILY. Would it make sense to have multiple POAs, each of which is limited to a specific decision/property, etc? The answer is probably YES.
The reality of an individually living in jurisdiction A having to deal with property in jurisdiction B is becoming more and more common.
After participating in the IRS Medic podcast I saw the a blog post written by the Toronto law firm of O’Sullivan law titled: “Powers of Attorney: Jurisdictional Challenges“. The post does an excellent job of defining why this issue is important:
In order for a POA to be valid, it must comply with the formal POA requirements of the applicable jurisdiction. These requirements are generally concerned with who may make a POA, who may be appointed as an attorney, who may or must witness the execution of the POA and when the POA will be in force. Although the formalities may appear similar across jurisdictions, each jurisdiction generally has its own unique requirements, with the result that extra-provincial/extra-territorial or foreign country POAs may not be recognized locally.
In summarizing the problem, the article includes:
Problems caused by the lack of uniformity in POA law among various jurisdictions are becoming well known to the legal community. The uniform law commissions of Canada and the United States have enacted uniform model POA legislation which, if implemented in these jurisdictions, would solve many of the various problems that exist with divergent laws. Some progress in this field has been made, however, a complete overhaul of the POA laws is far from complete. It is therefore imperative that individuals who have ties to other jurisdictions speak to their lawyers about having valid local POAs as part of their personal, estate and incapacity planning so that inconveniences such as those recently encountered by the Ontario couple can be avoided.
Bottom Line:
To be forewarned is to be forearmed. It makes good sense to have a POA created in accordance with the laws of the jurisdiction where the POA is to be used. For example: If you are a U.S. citizen living in Canada and a POA of needed to manage a property located in the United States, the UK or any other country, consider the creation of a separate POA for that particular jurisdiction!
John Richardson – Follow me X.com/ExpatriationLaw