Key Takeaways

  • An attorney in fact is a person appointed via a power of attorney document to make legal, financial, or medical decisions on another’s behalf.
  • The role requires trustworthiness and legal capacity but not necessarily legal expertise.
  • There are several types of powers of attorney, including general, special, durable, and springing.
  • The powers granted must be specifically outlined, and the attorney in fact has a fiduciary duty to act in the principal’s best interest.
  • Powers of attorney may terminate due to revocation, expiration, incapacity (if not durable), or death of the principal.
  • Appointing multiple attorneys in fact can offer oversight, but it may also complicate decision-making.
  • Each state has specific laws governing how a power of attorney must be created, executed, and recognized.

The appointment of attorney in fact gives that person the authority to act and make decisions on your behalf. Depending on the state, this can also be called an agent or mandatary.

Who Can Be an Attorney-in-Fact

An attorney-in-fact is any person you select including a spouse, child, relative, friend, or lawyer who meet the following qualifications:

  • A legal adult based on the laws of their jurisdiction.
  • They cannot be in the process of filing for or have an undischarged bankruptcy.
  • They cannot be an employee, operator, or owner of the nursing or extended-care facility where you reside.

The person selected as an attorney-in-fact is not required to have specific qualifications or background. Instead, they should possess qualities that have your best interests in mind including being trustworthy, knowledgeable, and able to comprehend the nuances of your specific situation. The person should also meet the time commitment the role entails, an understanding of financial management, and the ability to maintain accurate and detailed financial records. The person you select can also hold the role of executor or a beneficiary of your Last Will & Testament.

Can You Have More Than One Attorney in Fact?

Yes, you can appoint more than one attorney in fact. When doing so, it’s important to specify whether they must act jointly (making all decisions together) or severally (acting independently). Joint appointments can offer checks and balances but may delay decisions if all parties aren’t available. In contrast, independent authority offers greater flexibility but increases the risk of conflicting actions. Careful planning and legal advice can help minimize conflicts between co-attorneys in fact.

Powers of An Attorney-in-Fact

The appointed attorney-in-fact does not have blanket control to assume power and authority over your matters. They only deal with the specific components detailed in the Power of Attorney. These components will vary on a case by case basis and may include matters related to:

  • Personal business
  • Legal situations
  • Real Estate
  • Finances
  • Tax obligations

In the example of a Medical Power of Attorney, this person is responsible for only matters related to your health. If a Health Care Directive, or Living Will, exist they will have guidelines to follow that you have clearly stated. This is often related to relaying your medical preferences including if you want to use life support measures if the need arises. If you are physically incapacitated or suffer from severe mental issues, a court order must be acquired to legally appoint a Medical Power of Attorney.

Most importantly, an attorney-in-fact is legally required to follow the direction's stipulated. Failure to do so without proper cause will result in the attorney-in-fact being liable for any damages incurred.

Types of Power of Attorney

There are different types of power of attorney documents, each granting varying levels of authority:

  • General Power of Attorney: Grants broad authority to manage legal and financial matters. It is typically used for temporary periods, such as travel abroad.
  • Special (Limited) Power of Attorney: Restricts authority to specific tasks, like selling a house or handling a single financial transaction.
  • Durable Power of Attorney: Remains effective even if the principal becomes incapacitated. This type is often used in long-term estate and healthcare planning.
  • Springing Power of Attorney: Becomes effective only upon the occurrence of a specified event, such as the principal's incapacitation.

Selecting the appropriate type ensures the attorney in fact has the right scope of authority based on the situation.

Power of Attorney

A Power of Attorney is a document that legally appoints the person to the position of the attorney-in-fact, agent, or mandatary. The document will state if it is related to financial, business, real estate, or other matters. Examples of how an attorney-in-fact can utilize a power of attorney include the following:

  • 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.
  • With legal matters, the attorney-in-fact is allowed to file lawsuits, file any court documents, and communicate with your lawyer on legal matters related to you. In the situation where you are out of town during a divorce, the attorney-in-fact can act in your place including signing documents. You also have the power to limit what can be done including removing the ability to file lawsuits.
  • In real estate, an attorney-in-fact can handle all matters including:
    • Sales.
    • Rentals.
    • Trades.
    • Property management for residential, personal, and commercial properties.
  • In business, the attorney-in-fact can be your business manager and handle tasks such as decisions related to employment, budgets, and investments. They can also act as a proxy in meetings and vote in your place at board meetings.

Other situations where a power of attorney can be used by the attorney-in-fact include:

  • Maintaining family expenses such as medical expenses and school tuition.
  • Hiring professionals.
  • Managing tax requirements including filing and paying personal and corporate taxes.
  • Selling, exchanging and purchasing goods.
  • Distributing charitable donations.
  • Gifting money to friends and family.
  • Handling insurance transactions.
  • Managing a Living Trust.
  • Changing retirement plans and related benefits.

In any of these situations, you can set up a Specific Power of Attorney instead of a General Power of Attorney to limit the powers given to the attorney-in-fact. Additionally, you can choose to have different people manage different areas of your life or pick more than one person to handle the same matter. Joint attorneys-in-fact must make decisions together and at the same time. If one attorney-in-fact is not available, decisions cannot be made until the other becomes available.

How a Power of Attorney Ends

A power of attorney typically ends under the following circumstances:

  • Revocation: The principal can revoke the power at any time, as long as they are mentally competent.
  • Expiration: If the document includes an end date, the authority terminates on that date.
  • Incapacity: If the power of attorney is not durable, it ends when the principal becomes incapacitated.
  • Death: The death of the principal automatically revokes the power of attorney. The attorney in fact has no authority after this point.
  • Court invalidation: A court can invalidate the power of attorney if it finds it was created under duress or fraud.

Understanding these conditions ensures that both the principal and attorney in fact know the limits of the authority granted.

Legal Duties and Fiduciary Responsibilities

An attorney in fact must always act in the best interest of the principal. This fiduciary duty includes:

  • Acting within the scope of the authority granted.
  • Avoiding conflicts of interest and not using the role for personal gain.
  • Keeping accurate records of transactions and decisions made.
  • Maintaining separation between the principal’s funds and their own.

Breaching these duties can result in legal consequences, including civil liability or removal by a court.

State Requirements for Power of Attorney

Each state has its own laws governing how powers of attorney are created and recognized. Common requirements include:

  • Proper signing and notarization: Most states require notarization and/or witness signatures.
  • Specific forms: Some states have statutory forms that must be used for a power of attorney to be valid.
  • Durability language: In many jurisdictions, a power of attorney must explicitly state that it is durable to remain in effect after incapacity.

Failing to comply with state-specific laws may result in the power of attorney being invalid. It is highly advisable to consult with a local attorney to ensure compliance.

Frequently Asked Questions

  1. What is the difference between an attorney in fact and a power of attorney?
    A power of attorney is the legal document that grants authority, while the attorney in fact is the person appointed to act under that authority.
  2. Does an attorney in fact need to be a lawyer?
    No, an attorney in fact does not need to be a lawyer. The term "attorney" in this context simply means an authorized agent.
  3. Can I change or revoke a power of attorney?
    Yes, as long as you're mentally competent, you can revoke or amend a power of attorney at any time.
  4. What happens if an attorney in fact abuses their power?
    They may face civil liability and can be removed by a court. Criminal charges may also apply in cases of fraud or theft.
  5. Is a power of attorney valid in all states?
    While generally accepted across states, each jurisdiction has unique legal requirements. It's best to consult with an attorney to ensure your document is recognized.

If you need help with the appointment of an attorney-in-fact, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.