Ask the TITLEMAN™ - Power of Attorney; Trustees; Community Property

by John T. Lotardo aka TITLEMAN™
Sr. VP/General Counsel, Stewart Title & Trust of Phoenix, Inc.

Q. My boss asked me to handle this one thing and I am not sure it’s okay. You see, it’s with a “durable power of attorney” that the real estate agent sent us for a transaction. I think this may not constitute a legal binding contract, since the attorney in fact who signed the contract used this Power of Attorney which is over 2 years old and is not one of my company’s “Special Durable Power of Attorney.” Thank you for your assistance.
A. The mere fact that the power of attorney is 2 years old would not automatically terminate the right to use it- that is, unless it had an expiration clause. Is there one in the document? In these circumstances it is common for the attorney-in-fact ( also known as the “agent” in the statutes) to sign an affidavit of agent affirming that the power of attorney is still in effect and that the person who gave him or her the power is still alive. Also, you probably would want to record the original POA together with the affidavit of agent. However, keep an eye out for any personal identifying information such as Social Security number as those numbers will need to be partially removed from the document prior to recording. Otherwise the county recorder’s office will likely reject the recording.

Q. I have a question on a transaction dealing with an Arizona trust. We have two trustees listed but only one trustee executed the conveyance out. The attorney involved in the transaction let me know that it is an Arizona trust, and under Arizona law, there is no need to inquire as to authorization of the trustee and stated that we are protected under the statute. Is this enough for me to rely on?
A. The statute does talk about relying upon the trustee. But I usually would inquire into the matter if the original trustees of a “mom and pop” type of trust are/were the ones signing. If it is a trust of some complexity or if there are successor trustees signing, then more questions are in order. In particular, I would inquire as to why only one is signing. Someone died perhaps? It is a risk issue that I have found a few questions up-front makes for good underwriting (and reduces cumbersome issues after closing).

Q. In Arizona, if a man takes title as a married person and an inter-spousal deed is recorded where the wife also conveys her interest, must the non-titled spouse have to join in signatures on the new mortgage or is this not required as long as there has been no adverse proceedings commenced between the two?
A. Married persons typically cannot transfer their community property without the other spouse participating. But here it sounds as if the husband owns the property as his sole and separate. His wife disclaimed her interest and acknowledged his sole and separate right to the property when he acquired his interest. As a result, unless there has been some reason of “transmutation of the property from separate to communit,” it doesn’t sound like there is any need for her to sign to keep declaiming. With that said, sometimes lenders have the spouse not in title sign merely as an acknowledgement of the debt or possibly as a guarantor. I like to accommodate the particular lender whenever possible.

The information supplied is of a general nature and should not be relied upon as comprehensive legal advice. Please consult with your own local legal counsel. To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

Copyright John T. Lotardo. All rights reserved. John Lotardo (aka the TITLEMAN™) is Senior Vice-President and General Counsel for Stewart Title & Trust of Phoenix, Inc., and State Underwriting Counsel for Stewart Title Guaranty Company. He is a member of the National Advisory Councils for GoGetEscrow.com, GoGetLoan.com, GoGetNotary.com and GoGetRealEstate.com. The information supplied is of a general nature and should not be relied upon as comprehensive legal advice. Please consult with your own local legal counsel. For more about John, visit: www.GoGetEscrow.com/Get/Titleman or www.AskTheTitleman.com.