Attorney-in-fact
An attorney-in-fact is someone who has the legal power to act for another person. The power is given in a written document called a power of attorney. The person who gives the power is called the principal. The attorney-in-fact is also called an agent.
What an attorney-in-fact can do
An attorney-in-fact can do many things in the principal’s name. What exactly they can do depends on what the power of attorney document says. Some common powers include:
Handling money and property
The attorney-in-fact may be able to use the principal’s money and property. They could do things like:
- Pay the principal’s bills and taxes
- Manage the principal’s investments
- Buy or sell property for the principal
- Collect money owed to the principal
The power of attorney should say exactly what the attorney-in-fact can do with the principal’s money and property.
Making healthcare choices
A special kind of power of attorney, called a healthcare power of attorney, lets the attorney-in-fact make medical decisions. They can choose doctors, hospitals, and treatments if the principal cannot make those choices.
Doing business
An attorney-in-fact might run the principal’s business. They could sign contracts, hire and fire workers, and do other business tasks in the principal’s name.
When someone needs an attorney-in-fact
There are a few common reasons someone might need an attorney-in-fact:
Illness or injury
If a person is too sick or hurt to handle their own affairs, they can choose an attorney-in-fact to help. This lets their money and property still be taken care of.
Old age
As people get older, they may need more help with daily life. An attorney-in-fact can assist the elderly with their finances and other needs.
Travel
A person leaving the country for a long time might need someone to take care of things at home. An attorney-in-fact can do this while they are away.
How to pick an attorney-in-fact
Choosing the right attorney-in-fact is important. It should be someone the principal really trusts to act in their best interest. Some good options could be:
- A spouse or partner
- An adult child
- A close relative
- A longtime friend
- A lawyer or other professional
Whoever is picked, they should be responsible, good with money, and comfortable making big choices if needed.
The power of attorney document
To give someone power of attorney, the right legal document is needed. This document says what powers the attorney-in-fact will have. It should be very clear and specific.
Getting the document
A lawyer can write a power of attorney document. There are also forms available online or in office supply stores. But it is best to have a lawyer’s help to make sure it is done right.
Signing the document
The principal has to sign the power of attorney. Some require witnesses or a notary to make it official. The rules depend on where you live.
When it starts and ends
The power of attorney can start right away or only in certain cases, like if the principal becomes sick. It usually ends if the principal cancels it, dies, or becomes unable to make decisions. The document should say exactly when it begins and ends.
Different types of power of attorney
There are a few main kinds of power of attorney. Each gives the attorney-in-fact different levels of power.
General power of attorney
This gives the attorney-in-fact broad power to act on almost all the principal’s behalf. They can do most legal and financial tasks the principal could do.
Special or limited power of attorney
A special power of attorney is for one specific task, like signing a contract. It is very limited and ends when the task is done.
Durable power of attorney
Most powers of attorney end if the principal becomes incapacitated – that means unable to make decisions. But a durable power stays in effect even then. This lets the attorney-in-fact keep helping when the principal needs it most.
Springing power of attorney
A springing power of attorney only starts if something specific happens, like the principal becoming incapacitated. The power of attorney document says what event will make it “spring” into effect.
The attorney-in-fact’s duties
Being an attorney-in-fact is a big job. Some of the key duties are:
Following instructions
The attorney-in-fact has to do what the power of attorney document says. They cannot go beyond the powers it gives them.
Acting in the principal’s interest
The attorney-in-fact has to make choices that are best for the principal, not themselves. This is called a fiduciary duty.
Keeping good records
The attorney-in-fact should keep careful track of everything they do for the principal. This includes keeping all receipts, bills, and bank statements.
Communicating
The attorney-in-fact needs to keep the principal informed, if possible. They should also talk to other family members so everyone knows what is going on.
Ending power of attorney
A power of attorney ends in a few ways:
Cancellation
If the principal is still able to make decisions, they can cancel the power of attorney at any time. This is also called revocation.
Incapacity
Unless it is a durable power, a power of attorney ends if the principal becomes incapacitated.
Death
A power of attorney always ends when the principal dies. The attorney-in-fact’s power stops then, too.
