What Is Attorney In Fact vs. Attorney At Law?
An attorney in fact is an agent who is authorized to act on behalf of another person and an attorney at law is a lawyer who has been qualified to practice law.3 min read
2. What Is an Attorney In Fact?
3. The Powers and Duties of an Attorney In Fact
Attorney in fact vs. attorney at law — what's the difference? 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.
What Is Attorney At Law?
An attorney at law is permitted to represent another individual in the practice of law but is not allowed to make decisions on their behalf. This includes any decision-making, such as whether or not to settle. This term originated in England, where lawyers who were authorized to practice in the common law courts were referred to as attorneys at law.
In the British legal system, different terminology was used based on the type of law that was practiced. For example, the term "private attorney" was used for the one hired for business or legal affairs, whereas an attorney at law, or public attorney, was the qualified legal agent in the Common Law courts. At the turn of the 19th century, the distinction was eventually abolished when lawyers became known as solicitors. However, in the U.S., the term was adopted to refer to any law practitioner.
What Is an Attorney In Fact?
An attorney in fact is an agent who is authorized to act on behalf of another person but is not necessarily authorized to practice law. Their responsibilities and power depend on what's specifically stated in the power of attorney document.
If you want to become someone's attorney in fact, you must have them sign a power of attorney document. This will designate you as their agent and allow you to perform any actions on their behalf. An attorney in fact doesn't have a client. Instead, this person is called a "principal." There are two types of an attorney in fact:
- General power of attorney: Allows the attorney to conduct all business and sign documents on behalf of another person.
- Special power of attorney: Allows a person to conduct business and sign documents on behalf of another person, but only in specific situations.
Remember, the power of attorney document outlines when an attorney can act on another person's behalf, even in the case of a special power of attorney. An attorney in fact doesn't have the authorization to file legal actions or to represent their principal in court. An attorney in fact has the right to make decisions for another person who's been granted those powers. However, this title doesn't allow you to practice law, unless you're representing yourself.
The Powers and Duties of an Attorney In Fact
If designated as a general power of attorney, an attorney in fact can conduct any spending or investment actions that the principal would normally make. Therefore, the duties of an attorney in fact may include:
- Withdrawing funds
- Opening and closing bank accounts
- Trading stocks
- Paying bills
- Cashing checks
For example, a parent may designate a child a general power of attorney. By granting their child this title, the parent may receive help with bills and financial matters that may have become too difficult for them to handle. This usually occurs when the parent has become bedridden, immobile, or can't travel to take care of financial matters.
If a principal is not comfortable giving that much power to someone else, rather than designate a general power of attorney, they can decide to appoint an attorney in fact as a special power of attorney. For example, if a parent is generally healthy but undergoes surgery, they may grant their child special power of attorney until they recover or decide to revoke it.
It is important to note that all attorneys in fact have a fiduciary duty. The responsibilities of a fiduciary include:
- Keeping the best interest of the principal in mind
- Making financial decisions using the highest standards of good faith
- Keeping a principal's wishes and goals in mind at all times
- Being fair and loyal in all decision-making
An attorney in fact's power is limited in two important ways:
- Once a person passes away, an attorney in fact loses all power. An attorney in fact is only allowed to act while the principal is still alive.
- An attorney in fact only has control over assets that are not held in a trust. Rather, trust assets are always governed by a trustee.
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