Understanding the Role of an Attorney-in-Fact

The term ‘attorney-in-fact’ refers to an individual who is authorized to act on behalf of another person, known as the principal, under a power of attorney. This authority can be generalized or limited to specific matters, such as financial transactions or real estate dealings.

What is an Attorney-in-Fact?

An attorney-in-fact is entrusted with the legal authority to make decisions and take actions on behalf of another person. This designation is made through a legal document known as a power of attorney. Being named an attorney-in-fact does not grant the individual the same status as a licensed attorney; it simply means they have the power to act in specified capacities for the principal.

General vs. Limited Power of Attorney

A general power of attorney grants broad powers, allowing the attorney-in-fact to take almost any action on behalf of the principal. In contrast, a limited power of attorney restricts the attorney-in-fact’s actions to specific areas, such as handling financial transactions or managing real estate deals.

Practical Example

Imagine Mary plans to embark on a 6-month journey to explore the Middle East. Before she departs, she realizes she needs to sell her home. To ensure the process goes smoothly, she gives her trusted friend, John, the authority to sign the deed over to a buyer. John, serving as Mary’s attorney-in-fact, handles the transaction on her behalf, creating a seamless experience for all parties involved.

The Powers and Responsibilities

An attorney-in-fact must act in the best interest of the principal, executing their duties with diligence and honesty. They should maintain accurate records and may be required to provide updates or accounting to the principal or a third party.

Frequently Asked Questions

What is the difference between an attorney-in-fact and a power of attorney?

An attorney-in-fact is the person designated by a legal document called a power of attorney. The power of attorney is the instrument that grants them the authority to act on behalf of the principal.

Can anyone be an attorney-in-fact?

Generally, any competent adult can be an attorney-in-fact. It is advisable to choose someone trustworthy and capable of carrying out the specified responsibilities.

Do I need a lawyer to nominate an attorney-in-fact?

While it is not always necessary to have a lawyer to prepare a power of attorney, seeking legal advice may ensure the document meets all legal requirements and accurately reflects the principal’s wishes.

What happens if an attorney-in-fact misuses their power?

If an attorney-in-fact acts outside the scope of their authority or not in the best interest of the principal, they can be held legally accountable. The principal can revoke the power of attorney, and legal actions may be taken to address any misconduct.

Related Terms: power of attorney, legal agent, proxy, deed, authorization.