What is an Attorney-in-Fact for Power of Attorney?

Definition of Attorney-in-Fact

In the context of a power of attorney, an attorney-in-fact is an individual or entity authorized to act on behalf of another person, known as the principal. The principal grants legal authority to the attorney-in-fact through a written document called a power of attorney.

The attorney-in-fact is empowered to make decisions and perform actions within the scope of authority granted by the principal. This authority can range from handling financial matters to making healthcare decisions, depending on the specific terms of the power of attorney.

Scope of Authority

The scope of authority granted to an attorney-in-fact varies depending on the type of power of attorney. Common types include:

• General power of attorney: Grants broad authority to act on behalf of the principal in most matters.
• Limited power of attorney: Grants authority to act only in specific areas, such as managing finances or making healthcare decisions.
• Durable power of attorney: Remains in effect even if the principal becomes incapacitated.

The principal should carefully consider the scope of authority granted to the attorney-in-fact to ensure that their wishes are respected and their interests are protected.

Purposes of Power of Attorney

A power of attorney is a legal document that gives someone else the authority to act on your behalf. This can be useful in a variety of situations, such as when you are out of town, incapacitated, or otherwise unable to handle your own affairs.

There are many different reasons why you might create a power of attorney. Some of the most common reasons include:

Managing Finances

• To allow someone else to pay your bills, manage your investments, and make other financial decisions on your behalf.
• To ensure that your financial affairs are handled according to your wishes, even if you are unable to do so yourself.

Making Healthcare Decisions

• To allow someone else to make medical decisions on your behalf if you are unable to do so yourself.
• To ensure that your medical wishes are respected, even if you are unable to communicate them yourself.

Handling Legal Matters

• To allow someone else to represent you in court or other legal proceedings.
• To allow someone else to sign contracts or other legal documents on your behalf.

Selecting an Attorney-in-Fact

Choosing the right attorney-in-fact is crucial. They should be someone you trust implicitly and who shares your values. Here are some guidelines to consider:

Trustworthiness and Reliability

Your attorney-in-fact should be someone you can trust to act in your best interests, even when it’s difficult. They should be reliable and responsible, with a proven track record of integrity.

Ability to Handle Financial and Legal Matters

Your attorney-in-fact should be capable of handling financial and legal matters. This may include managing your finances, paying bills, filing taxes, or making legal decisions on your behalf.

Compatibility with the Principal’s Values

Your attorney-in-fact should share your values and goals. They should understand your wishes and be willing to carry them out. This is especially important if you have strong feelings about certain issues, such as end-of-life care or charitable giving.

Types of Power of Attorney

Power of attorney documents vary in scope and purpose. Understanding the different types of power of attorney can help you choose the one that best suits your needs.

General Power of Attorney

A general power of attorney grants broad authority to the attorney-in-fact to act on your behalf in most financial and legal matters. This type of power of attorney is typically used for short-term situations, such as when you are out of town or unable to manage your affairs due to illness or injury.

Durable Power of Attorney

A durable power of attorney remains in effect even if you become incapacitated. This type of power of attorney is often used for long-term situations, such as when you are concerned about your ability to make decisions in the future due to age or illness.

Limited Power of Attorney

A limited power of attorney grants authority to the attorney-in-fact to act on your behalf only in specific matters. This type of power of attorney is often used for specific transactions, such as selling a property or managing investments.

Creating a Power of Attorney

Creating a power of attorney involves several steps to ensure the document is legally valid and meets your specific needs.

Choosing an Attorney-in-Fact

The first step is to choose an attorney-in-fact. This person should be someone you trust and who is responsible and capable of handling your affairs. Consider their age, health, and financial acumen. Discuss the responsibilities and potential limitations of the power of attorney with them to ensure they are comfortable and understand their role.

Determining the Scope of Authority

Next, determine the scope of authority you want to grant your attorney-in-fact. This includes specifying the types of decisions they can make on your behalf. Consider whether you want them to have general authority over all your affairs or limit their authority to specific tasks, such as managing finances or making medical decisions.

Signing and Notarizing the Document

Once you have chosen an attorney-in-fact and determined the scope of authority, you need to sign and notarize the power of attorney document. This document should clearly state the name of the attorney-in-fact, the scope of their authority, and the effective dates of the power of attorney. It is important to have the document notarized by a licensed notary public to make it legally binding.

Duties and Responsibilities of an Attorney-in-Fact

An attorney-in-fact has significant ethical and legal obligations. They must act in the best interests of the principal, keep accurate records, and avoid conflicts of interest.

The attorney-in-fact must always act in the best interests of the principal. This means making decisions that are in the principal’s best interest, even if they are not in the attorney-in-fact’s own best interest.

The attorney-in-fact must keep accurate records of all transactions and decisions made on behalf of the principal. These records must be kept in a safe and secure location and must be made available to the principal upon request.

The attorney-in-fact must avoid any conflicts of interest. This means that the attorney-in-fact cannot make any decisions that would benefit them financially or otherwise at the expense of the principal.

Ethical Obligations

• Act in the best interests of the principal
• Keep accurate records
• Avoid conflicts of interest
• Maintain confidentiality
• Be accountable for their actions

Termination of Power of Attorney

A power of attorney can be terminated under certain circumstances, including:

Revocation by the Principal

The principal has the right to revoke a power of attorney at any time, as long as they are of sound mind. Revocation can be done orally or in writing.

Death of the Principal

A power of attorney automatically terminates upon the death of the principal.

Incapacity of the Attorney-in-Fact

If the attorney-in-fact becomes incapacitated, the power of attorney may be terminated by a court order.