An attorney-in-fact is a person who has been assigned and authorized to take decisions and act on behalf of another person, especially when it comes to business decisions and official transactions. The individual who needs representation will normally authorize another person as their attorney-in-fact through a power of attorney.
There are no specific qualifications required for an attorney-in-fact to hold. This person can be any individual, even a close friend or family member. There are three types of powers that can be given to an attorney-in-fact – general powers, limited powers, and special powers.
A power of attorney will come to an end if the principal becomes incapacitated. If the attorney-in-fact is given a durable power of attorney, they can continue holding the powers assigned to them on behalf of the principal.
In situations where a person is assigned to act on behalf of another, a power of attorney is required to authorize such a transaction. The person so authorized is known as an attorney-in-fact.
It is not necessary that an attorney-in-fact should be a lawyer. There are no specific qualifications required for an attorney-in-fact to hold. This person can be any individual, even a close friend or family member of the person who needs representation.
Powers of the attorney-in-fact
Normally, there are three types of powers that can be given to an attorney-in-fact. These are:
- General powers: When given general powers, an attorney-in-fact can make all decisions including financial ones on behalf of the representee apart from signing documents and conducting business on their behalf.
- Limited powers: Under a limited power of attorney, an attorney-in-fact can make only those decisions they are authorized to make. They cannot make any decisions or carry out transactions outside of those that are allowed.
- Special powers: Special powers of attorney are the most restrictive and allow an attorney-in-fact to only conduct business or make decisions that are documented in the power of attorney.
Duties of an attorney-in-fact
The duties of an attorney-in-fact are tied to the powers given to them in the power of attorney.
If the powers given to the attorney-in-fact are general in nature, then they can decide to take any action that the principal would otherwise take. They are empowered to carry out transactions such as opening and closing bank accounts, trading stocks, withdrawing money, cashing checks, paying bills, etc. on behalf of the person they are representing.
If the power of attorney is limited, then the attorney-in-fact is empowered to take decisions only in certain areas but not others. For example, they can take business decisions after consulting with the principal but cannot be involved in financial decisions.
If the power of attorney gives the attorney-in-fact only specific powers, then they can only carry such actions as are mentioned in the document.
What is a durable power of attorney?
An attorney-in-fact can continue to remain so only for as long as they are able to carry out their duties in a capable manner. Also, the power of attorney will come to an end if the principal becomes incapacitated. But, if the power of attorney is a durable one, the attorney-in-fact can continue holding the powers assigned to them as long as they have the capacity to do so and take decisions and conduct business on behalf of the principal. A durable power of attorney can also be given in advance. It will normally have the conditional clause that it will come into effect only when the principal becomes incapacitated.
