Power of Attorney in NJ: The Facts

October 11, 2019

When you authorize a power-of-attorney (‘POA’), you as the principal are empowering an agent, your ‘attorney-in-fact,’ to act on your behalf in certain situations.  There can be more than one agent in such an agreement; this article will assume that there is only one. Situations in which you create a POA can range from minor financial decisions to major medical events.  In New Jersey, both the principal and agent must be of sound mind at the time the agreement is signed, and there must be at least two witnesses and a licensed notary present. 


There are four types of POA’s in NJ.  In the first, a general power of attorney, the principle authorizes an agent to act on his behalf in a variety of matters.  What is different about this compared to other POA’s is that the principal must be of a sound mind throughout the duration of the agreement.  If the principal becomes incapacitated or dies, the POA ends.  A durable POA is an extension of the general type because it allows the agent to keep making decisions even after the principal becomes incapacitated.  This type of agreement is commonly set between an elderly person who has been diagnosed with a mental illness and a loved one.  The person may still be of sound mind to sign the agreement at the time he is diagnosed, but he wants it to continue even after the effects of the illness kick in. In a temporary POA the principal grants an agent authority for one specific matter and is limited in time. An example of this might be a principal giving POA to his actual attorney. The agreement terminates as soon as the transaction ‘closes.’  The fourth type is a springing power of attorney and only comes into effect if the principal is incapacitated.  It is not applicable at all so long as the principal is of sound mind.  And if a “springing” event does occur the agent is to prove it to the court in order for the agreement to take effect. 


To establish a POA agreement, please review the types of agreements available in New Jersey with a knowledgeable attorney and decide which is best for you. You can obtain a form online or through a legal office, and you and your agent should fill it out in the appropriate sections.  Bring the completed form to a notary public with a witness so that you and your agent may validly sign the document.  When choosing an agent, make sure to choose somebody who is reliable, cares about your well-being and is a quick decision maker.  Things can quickly go wrong if your agent’s interests do not align with yours, so be sure to carefully screen potential agents. 


Thinking about designating a power of attorney can be overwhelming, or depressing if it is a critical situation.  But the sooner you prepare yourself the better off you and your agent will be.  If a situation comes up where the POA must go into effect, all parties involved will be better off if they know what to do right away.

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