When signing documents, if the party is a business, estate or acting under a power of attorney, how should the documents be signed?
This is a frequent question we hear on the legal hotline. There, we can provide general guidance to help you know what questions to ask so you can better handle the transaction. In short, you need to know the identity of the party involved, who is signing on behalf of that party and under what authority the person is signing documents.
With a business, whether it be a corporation, an LLC or a partnership, the organizational structure of the business and governing documents will dictate who can sign documents. It is wise to request a copy of the document authorizing the individual to sign on behalf of the business. The document could be a resolution or a copy of the corporate bylaws, an LLC’s operating agreement or the partnership agreement.
Most often, the person signing will have a title of some sort, e.g. president, member, manager or partner. The person should sign his or her name followed by the title the person holds. The most common situations include:
- For a corporation: “Mary Smith, president” or “Mary Smith, CEO” or “Mary Smith, VP”
- For an LLC: “James Jones, member” or “Shane Jones, manager”
- For a partnership: “Amy Williams, partner”
For estates, how a party signs depends on the existence of a will. A will names one or more executors or executrixes to manage the estate. The difference between executor and executrix is gender, with executor being the male pronoun and executrix the female pronoun. The Orphan’s Court will grant letters testamentary to the executor or executrix and you should receive copy of the grant of letters for your file.
When there is no will, an administrator is named by the Orphan’s Court to manage the estate. The Orphan’s Court will grant letters of administration and you should likewise receive a copy of the grant of letters for your file.
The estate should be identified as “Estate of .” Whomever is managing the estate should sign his or her name followed by the appropriate title of executor/executrix or administrator, for example:
- “Jack Smith, executor” or “Donna Smith, executrix”
- “Scott Jones, administrator”
The letters issued by the Orphan’s Court will identify each person responsible for managing the estate. When more than one person is named to manage the estate, you should consult with the estate attorney to verify who needs to sign the documents, since you may need the signature of more than one person.
It is not uncommon to grant a power of attorney to someone to handle a real estate transaction. Common reasons a party acts under a power of attorney include the incapacity of the property owner, the relocation of the property owner or the party is otherwise unavailable.
Whenever a party is acting under a power of attorney, be sure to keep a copy of the power of attorney and acknowledgments for your records. You should consult with an attorney if you have any questions or concerns about the validity of a power of attorney.
There is no single correct way for someone acting under a power of attorney to sign documents. It is important to make clear that the person is signing under a power of attorney. The two most common acceptable formats I have seen people sign under a power of attorney are:
- “Bill Smith, by John Smith, power of attorney”
- “John Smith, power of attorney for Bill Smith”
I have also seen “power of attorney” replaced with “attorney in fact,” “agent” or “POA.” Each of these should also be acceptable.
When a deed for real estate is signed under a power of attorney, the power of attorney must be recorded. You should consult with the recorder of deeds office, title insurance agent and/or an attorney to ensure the power of attorney is acceptable for recording. One requirement for recording is that the power of attorney must be an original or a certified copy issued by a court or an office for the recording of deeds.
If you continue to have questions, do not hesitate to speak first with your broker and to then call the hotline, should you need additional guidance.
Brian Carter, Esq. is one of four PAR attorneys who staff the legal hotline.