The document is also known as a durable power of attorney for finances. The POA can take effect immediately or can become effective only if you are incapacitated. The person you appoint is known as your agent, or attorney-in-fact, although the individual or company doesn't have to be a lawyer.
Full Answer
Drafting a durable power of attorney is an act of love. By giving someone legal authority to make important decisions for you regarding your health and finances in the event of an emergency, you spare your family, and yourself, considerable stress.
The person has a fiduciary duty to act in your best interest. Most states have a simple power of attorney form to help you create an official financial power of attorney document. Before it becomes a legally binding document, it must be signed, witnessed, and notarized by a notary public.
A power of attorney is a legal practice of the document. In that sense, the principal (you) assigns another person (agent or attorney) to act and make decisions on your behalf. The document permits the agent to make the decisions on your behalf on a limited basis or broader set of limits.
A durable power of attorney is not time-limited, although it may be purpose limited. For example, it may be limited to allowing the person holding the power of attorney to make financial decisions or medical decisions. A non-durable power of attorney is limited to a specific time and purpose.
The person named in a power of attorney to act on your behalf is commonly referred to as your "agent" or "attorney-in-fact." With a valid power of attorney, your agent can take any action permitted in the document.
An attorney in fact is an agent authorized to act on behalf of another person, but not necessarily authorized to practice law, e.g. a person authorized to act by a power of attorney.
An attorney in fact is an agent who is authorized to act on behalf of another person but isn't necessarily authorized to practice law. An attorney at law is a lawyer who has been legally qualified to prosecute and defend actions before a court of law.
You can write a POA in two forms: general or limited. A general power of attorney allows the agent to make a wide range of decisions. This is your best option if you want to maximize the person's freedom to handle your assets and manage your care.
In finance, the attorney-in-fact is given the power to make payments, cash checks, manage bank accounts, and close accounts if necessary. If you require long-term hospital care, your cable, internet, or phone services may need to be suspended or closed.
If the agent is acting improperly, family members can file a petition in court challenging the agent. If the court finds the agent is not acting in the principal's best interest, the court can revoke the power of attorney and appoint a guardian.
Choosing an Attorney-in-FactAvoid Family Conflict.Choose Someone Nearby, If Possible.Name a Person, Not a Bank.If You're Married, Probably Name Your Spouse.If You Have a Living Trust, Name Your Trustee.Talk With Your Attorney-in-Fact.
For example, if John Smith is signing on behalf of Jane Doe, the signature might read, “John Smith, attorney in fact for Jane Doe” or “Jane Doe, signed by John Smith, attorney-in-fact.” Attorneys in fact may only be used for acknowledgments.
General Power of Attorney The general power of attorney is a broad mandate that gives an agent a lot of power to handle the affairs of a principal. The agent or the person designated to act on behalf of the principal is charged with handling several tasks.
Procedure of Power of AttorneyStep 1: Reach out to our expert lawyers who will draft a suitable POA for you.Step 2: Our legal experts will ask you generic questions and go through your requirements.Step 3: The details will be enumerated by the lawyer and a POA will be drafted.More items...
DisadvantagesYour loved one's competence at the time of writing the power of attorney might be questioned later.Some financial institutions require that the document be written on special forms.Some institutions may refuse to recognize a document after six months to one year.More items...
If you're aged 18 or older and have the mental ability to make financial, property and medical decisions for yourself, you can arrange for someone else to make these decisions for you in the future. This legal authority is called "lasting power of attorney".
AgeLab outlines very well the four types of power of attorney, each with its unique purpose:General Power of Attorney. ... Durable Power of Attorney. ... Special or Limited Power of Attorney. ... Springing Durable Power of Attorney.
Liability of Attorney-in-Fact An attorney-in-fact can be held liable if he willfully acts in a manner that is not in the best interest of the principal. He may also be held liable if he acts with gross negligence, causing damages to the principal.
For example, if John Smith is signing on behalf of Jane Doe, the signature might read, “John Smith, attorney in fact for Jane Doe” or “Jane Doe, signed by John Smith, attorney-in-fact.” Attorneys in fact may only be used for acknowledgments.
Execution Requirements In order to be effective, a Florida power of attorney must be signed by the principal and by two witnesses, and be notarized. In the event the principal is physically unable to sign, the notary public may sign the principal's name on the document.
If you do not nominate your attorney-in-fact to serve as the guardian or conservator of your estate, your power of attorney document will not mention the issue at all. In this case, the court would appoint a guardian or conservator by determining what would be in your best interests, but would do so without input from you.
When Court Supervision May Be Required. An attorney-in-fact is not directly supervised by a court; that's the whole point of naming one. The attorney-in-fact is not required to file reports with any courts or government agencies.
Some states have statutes that set out specific procedures for such court actions. For example, a California statute authorizes any interested person, including relatives and friends of the principal, to ask a court to resolve questions relating to the durable power of attorney. Tennessee law provides that the next of kin can petition a court to require an attorney-in-fact to post a bond—something like an insurance policy, generally issued by a surety company.
It is possible, though highly unlikely, that a court proceeding could be brought to invalidate or overrule your durable power of attorney for finances. If your document is invalidated for any reason, a judge will appoint someone to manage your finances. This person is usually called a "guardian of your estate" or "conservator of your estate.".
Even if your state does not have a statute specifically authorizing court actions, someone interested in your welfare and upset with the attorney-in-fact could still go to court and ask for a conservator to be appointed.
If you don't name a conserva tor in your power of attorney document, state law generally provides a priority list for who should be appointed.
If a conservator is appointed for you, the attorney-in-fact will have to account to the conservator— or the conservator may revoke your durable power of attorney altogether. As mentioned above, you can use your durable power of attorney for finances to name your attorney-in-fact as your first choice for conservator.