Attorney-in-Fact Explained
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Attorney-in-Fact Explained

6 Min.

An attorney-in-fact is someone designated to act on behalf of another person in various matters. This is done through the granting of power of attorney. The attorney-in-fact, also known as the agent, makes decisions for the principal, who appoints them. It's important to note that an attorney-in-fact doesn't have to be a lawyer. In cases of incapacitation, the courts can assign someone a power of attorney.

Basics

An attorney-in-fact, also known as an agent, is a person authorized to act on behalf of another person, typically for official or business matters. The person granting this authority is called the principal. While the principal usually designates someone as their attorney-in-fact by granting power of attorney, a court may assign this role if the principal is unable to make decisions.

The requirements and regulations for power of attorney may vary depending on the jurisdiction. It's important to note that an attorney-in-fact doesn't have to be a lawyer and can be a family member or a close friend. Additionally, power of attorney can be granted to multiple individuals, and the terms can specify whether decisions require a simple majority or unanimous agreement.

Attorney-in-Fact Powers and Duties

An attorney-in-fact, also known as an agent, is a person legally appointed to act on behalf of another person in legal or business matters. The principal appoints the attorney-in-fact through a document called a power of attorney (POA). This document grants the attorney-in-fact the authority to make decisions and take actions on behalf of the principal. These actions can include signing documents, managing finances, or selling property.

While an attorney-in-fact doesn't have to be a lawyer, they must always act in the best interests of the principal and follow the instructions outlined in the power of attorney. Maintaining confidentiality and keeping records of all actions taken on behalf of the principal are also important responsibilities of the attorney-in-fact.

It's crucial to understand that an attorney-in-fact is different from a lawyer or attorney. Lawyers are licensed professionals who practice law, represent clients, and provide legal advice. On the other hand, an attorney-in-fact is any person appointed to act on behalf of another person in legal or business matters.

Two Common Types of POA

When assigning power of attorney, there are two main types to consider: general power of attorney and limited power of attorney.

  1. General POA: This grants the attorney-in-fact broad authority to act on behalf of the principal. They can handle any business, sign documents, and make various decisions, including financial ones, for the principal.
  2. Limited POA: Also known as "special power of attorney," this type restricts the authority of the attorney-in-fact. They have specific powers within designated areas and can make decisions solely related to the topics specified in the assigned document.

It is crucial to select a trustworthy individual when assigning power of attorney. A general power of attorney allows the attorney-in-fact to handle various actions on behalf of the principal, while a limited power of attorney grants specific powers within certain areas and restrictions in others.

Attorney-in-Fact vs. Attorney-at-Law

An attorney-in-fact, also known as an agent, is someone designated to act on behalf of another person in various matters through the granting of power of attorney. The attorney-in-fact doesn't have to be a lawyer and can be a family member or close friend. While an attorney-in-fact makes decisions on behalf of their principal, an attorney-at-law provides advice and representation in legal matters without making decisions for the client. A durable power of attorney remains effective even if the principal becomes incapacitated, which would typically terminate it.

Universal Durable Power of Attorney

A power of attorney usually ends when a person dies, becomes incapacitated, or revokes it through a court notice. It can also have an expiration date or be fulfilled once its purpose is accomplished. However, if it's a durable power of attorney, the attorney-in-fact maintains authority even if the principal becomes incapacitated. In such cases, the attorney-in-fact can continue making decisions for the principal, including financial and healthcare matters.

A durable power of attorney can be granted in advance, but it only takes effect when a specific event occurs, like the principal's incapacitation. This is known as a "springing" power of attorney. It's a good idea to name alternate successors in case the original attorney-in-fact is unavailable or unwilling to assume the responsibility due to changed circumstances.

Questions & Answers

Cases Where Attorney-in-Fact Is Needed

Designating an attorney-in-fact serves various purposes. It can provide convenience, such as when you need someone to represent you in person for tasks like asset transactions. It can also be useful when you are unable to act on your behalf due to physical or mental incapacity or for situations like travel, illness, or accidents.

Does an Attorney-in-Fact Equal Being a Lawyer?

An attorney-in-fact can be any person of your choice, including family members or close friends. It is not mandatory to appoint a lawyer, although you have the option to choose an attorney-at-law as your attorney-in-fact if you prefer.

What's the Difference Between an Attorney and Attorney-in-Fact?

It's important to distinguish between an attorney-in-fact and a lawyer or attorney. While lawyers are legally qualified professionals, an attorney-in-fact is an individual who has been authorized to act on behalf of another person.

Are Power of Attorney and Attorney-in-Fact Equivalent?

When you grant power of attorney to someone, they become your attorney-in-fact. The attorney-in-fact is authorized to make decisions on your behalf and must provide the written document as proof of their authority when acting on your behalf.

What Are the Liabilities of an Attorney-in-Fact?

As an attorney-in-fact, you have a legal obligation to fulfill the duties assigned to you by the principal. It is crucial to act in the principal's best interests and adhere to the instructions in the power of attorney. Failure to fulfill your duties can result in liability for any damages or losses caused by your actions. You may also be held responsible for unauthorized actions outside the scope of the power of attorney. To avoid liability, carefully review the power of attorney, understand your responsibilities, and seek legal guidance when needed.

Conclusion

An attorney-in-fact is someone authorized to make decisions for another person, known as the "principal." This authority is granted through a written document called power of attorney. There are two types: general (covering a wide range of decisions) and limited (specific to certain matters). It usually stays in effect unless the principal dies, becomes incapacitated, or revokes it officially. A durable power of attorney allows the attorney-in-fact to continue acting if the principal becomes incapacitated.

Choosing an attorney-in-fact is a crucial decision based on trust. Typically, family members and close friends are preferred. If multiple attorneys-in-fact are appointed, specify whether decisions can be made by a majority vote or require unanimous agreement.

 

Attorney-in-Fact
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