The Difference Between an Attorney-in-Fact and a Power of Attorney

Understanding the Basics

When dealing with legal matters, it's crucial to understand the terminology used. Two terms that often cause confusion are "Attorney-in-Fact" and "Power of Attorney." While they are related, they refer to different concepts. A Power of Attorney is a legal document, whereas an Attorney-in-Fact is a person appointed to act on someone else's behalf through that document.

What is a Power of Attorney?

A Power of Attorney (POA) is a legal instrument that grants one person the authority to act for another person in legal or financial matters. The person who creates the POA is known as the "principal," and the person who is granted the authority is called the "Attorney-in-Fact" or "agent." POAs can be broad or limited in scope, depending on the principal's needs.

Types of Power of Attorney

There are several types of Power of Attorney, each serving a different purpose:

• General Power of Attorney: Grants broad powers to the agent to manage the principal's affairs.
• Limited Power of Attorney: Restricts the agent's powers to specific tasks or situations.
• Durable Power of Attorney: Remains in effect even if the principal becomes incapacitated.
• Springing Power of Attorney: Only becomes effective under certain conditions, such as the principal's incapacitation.

Who is an Attorney-in-Fact?

An Attorney-in-Fact is an individual appointed by the principal through the Power of Attorney document to act on their behalf. This role can be filled by anyone the principal trusts, such as a family member, friend, or professional advisor. The Attorney-in-Fact is responsible for carrying out the duties specified in the POA and is expected to act in the principal's best interests.

Responsibilities and Limitations

The responsibilities of an Attorney-in-Fact can vary widely depending on the POA's terms. They may include managing financial accounts, signing documents, or making healthcare decisions. However, the Attorney-in-Fact cannot act outside the authority granted by the POA and must adhere to any limitations set forth in the document.

The Importance of Choosing the Right Attorney-in-Fact

Choosing the right Attorney-in-Fact is crucial, as this person will have significant control over your affairs. It's essential to select someone trustworthy, reliable, and capable of handling the responsibilities outlined in the POA. Consider discussing your decision with potential candidates to ensure they are comfortable with the role and understand your expectations.

Revoking a Power of Attorney

If circumstances change or if the principal loses confidence in their Attorney-in-Fact, they can revoke the Power of Attorney. This process typically involves notifying the Attorney-in-Fact in writing and destroying the original POA document. In some cases, it may also require notifying any institutions or individuals who were aware of the POA's existence.

Understanding the difference between an Attorney-in-Fact and a Power of Attorney is essential for anyone considering granting or accepting this legal responsibility. By carefully selecting the right person and crafting a well-defined POA, you can ensure that your interests are protected and your affairs are managed according to your wishes.