What is an Attorney-in-Fact

Wondering what an attorney-in-fact is? If you want to know, this post can help you.

What do you do when you have important transactions that you cannot attend to personally? You can actually authorize someone to do it for you. No qualifications are needed. You can choose anyone to handle your matters for you. They can be your secretary, one of your trusted friends or a family member. Whoever you choose, grant them the authority to act on your behalf with a power of attorney. They will be called your attorney-in-fact.

Your chosen attorney-in-fact can now do official business or make decisions as if they were you, as long as it is stated in the power of attorney.

How to Choose the Best Attorney-in-Fact

It is crucial to choose the best one to represent you. Ask yourself, who will you give that power to? Assigning just one person to do everything for you may be too much responsibility. Like putting all your eggs in one basket, it may be too risky.

You may consider preparing different powers of attorneys, and assigning different people for different matters. Or a single power of attorney appointing different people for specific matters. You can assign someone to handle your finances, another one for your health concerns, etc.

Although there are no qualifications needed to be an attorney-in-fact, the questions below might help you decide who the best candidate is.

• Are they reliable and trustworthy? Remember, power can corrupt so be careful whom you choose and the extent of control you will give them.
• Are they willing and capable? Make sure they will be able to perform your wishes and instructions as stated in the agreement even with the possible objections from your family members.
• Are they organized? Check if they are handling their personal matters well. This may be a great reflection of how they will handle yours in the future.
• Do they have the time? If the person you are eyeing has too much on their plate, there’s a good chance they may not be able to perform the duties expected from them.

What is a Power of Attorney

A power of attorney is the grant that assigns someone as your attorney-in-fact. In this agreement, you are called the principal and your attorney-in-fact is the agent. It may only be valid if you, as the principal, have enough mental capacity when the contract is being drafted. This piece of contract can give so much power to its holder so you have to understand it thoroughly.

You should be the one setting up your power of attorney, or at least present while a lawyer is drafting it for you. This is to make sure that all details are to your liking. It is also better to draft one while you don’t need it yet, especially when you have dependents and property to protect.

When you have a family and estate to protect, consider preparing this ahead of time to avoid future family dramas, and financial and legal headaches.

The extent of power you give to your agent depends on the type of the power of attorney you grant them. Below are the different types of power of attorney and the extent of power they can provide your agent.

General

A general power of attorney means that you allow your attorney-in-fact to act on your behalf in any legal matters. They can manage your finances, sell your properties, etc. This type of arrangement terminates if you, as the principal, die, become incapacitated or revoke it.

Limited 

Limited or a special power of attorney only gives your attorney-in-fact specific power to certain matters and can be for a specific time only. Real estate agents usually use this type of agreement so they can legally sell someone’s property. When all conditions stated in the power of attorney are met or the specified time is done, then the power of attorney terminates.

Durable

This type of power of attorney has a durable clause in it. This durable clause keeps the agreement in force and allows your attorney-in-fact to still act on your behalf even if you become incapacitated. The extent of the durable clause’s power will depend on what is stated in the power of attorney. You can also prepare a springing durable power of attorney. This type of agreement has additional conditions before the power of attorney can take effect. Examples of such additional conditions may be in the event of the principal’s mental incapacity, or whatever event is stated in the agreement.

How to Prepare a Power of Attorney

A lot of editable and downloadable templates are available online. Since different states have different laws, they will also have different requirements. Make sure you download the right template for your state.

To make things easier for you, ask a professional in these types of matters. You can ask a lawyer friend to help you draft a good power of attorney. Or you can hire a lawyer from your state who has experience in this field. This will make it easier for you because you have the confidence that they know all applicable state laws and requirements. Plus, you can ensure that you are still safe and protected even when giving other people the power to decide and act for you. Remember to always review the written document first before having it signed and/ or notarized.

In a nutshell, an attorney-in-fact must be trusted and capable enough to do tasks for you. Otherwise, you might be on the losing end.

Hire Warner & Warner 

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