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Seal the Deal: A Guide To Notarizing Proceeds Authorization Forms for Peace of Mind


A proceeds authorization form is typically used in situations where an organization or individual needs to authorize and direct the disbursement or transfer of funds or proceeds from a specific source or account. Many types of proceeds authorization forms require notarization, especially in situations involving significant sums of money or legal transactions.

Outlined below are some common situations where a proceeds authorization form might be used:




Real Estate Transactions:

When a property is sold, a proceeds authorization form may be used by the seller to instruct the title company or escrow agent how to disburse the sale proceeds. This may include paying off any outstanding mortgages, taxes, commissions, and transferring the remaining funds to the seller's designated account. In my experience, notarization of this form can be required, as real estate transactions involve the transfer of a valuable asset and large sums of money.


Investment Account Distributions:

When withdrawing or transferring funds from an investment account like a brokerage, mutual fund, or retirement account, investors may need to complete a proceeds authorization form. This essential document provides clear instructions on how to properly distribute the proceeds. Notarization may or may not be required, depending on the specific policies of the financial institution holding the investment account and the amount of money involved.


Insurance Claims:

After an insurance claim is settled, the insurance company may require the policyholder to complete a proceeds authorization form to specify how the claim payment should be distributed, such as receiving a check, direct deposit, or paying off outstanding liens or loans. For larger insurance claim payouts, notarization of the proceeds authorization form is often required to verify the identity of the policyholder and prevent fraud.


Lawsuit Settlements:

In the case of a legal settlement or judgment, a proceeds authorization form may be used by the plaintiff or their attorney to direct how the settlement funds should be disbursed, including any payments to attorneys, liens, or the plaintiff's personal account. Proceeds authorization forms related to lawsuit settlements and judgments generally require notarization, especially if the settlement amount is substantial.


Estate Distributions:

When assets are being distributed from an estate or trust, a proceeds authorization form may be required by the executor or trustee to obtain instructions from the beneficiaries on how to handle the distribution of their share of the proceeds. Notarization of this form is sometimes required to ensure the authenticity of the instructions of the beneficiaries.


Business Asset Sales:

If a business sells an asset, such as equipment or intellectual property, a proceeds authorization form may be used to direct the buyer on how to transfer the sale proceeds to the seller's designated account. Notarization of the proceeds authorization form could be mandatory for sizable business assets with significant financial value.


In general, a proceeds authorization form helps ensure that funds are properly accounted for and distributed according to the specific instructions of the authorized party or parties involved in the transaction or settlement. This form is more likely to be notarized for transactions involving real estate, legal settlements, estate distributions and other situations where the financial stakes are high or there is a need for added verificatio and legal protection. For smaller transactions or distributions, notarization may not always be necessary, but it's always advisable to check with the relevant parties or institutions to confirm their specific requirements.


ABOUT THE AUTHOR


Kimberly D. McKendell, the owner of Notary Long Beach-Mobile Notary & Apostile, is a mobile notary public based in Long Beach who has completed thousands of notarizations since 2001. Call her for all of your notary needs. She specializes in apostilles and authentications, real estate documents, living trusts, medical records, estate planning documents, title transfers, patent forms, international adoptions, pre- and post-nuptial agreements, and power of attorney documents.




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