An attorney-in-fact, also known as an “agent,” is an individual authorized to act on behalf of another person, the “principal,” in business or official transactions. This role is typically conferred through a power of attorney, although a court may appoint an attorney-in-fact if the principal is incapacitated. The regulations governing power of attorney can vary by jurisdiction.
An attorney-in-fact does not necessarily need to be a lawyer; the appointment often involves a trusted family member or friend. Multiple agents can be appointed, and the conditions under which they can act jointly or independently should be clarified.
Key Takeaways
- An attorney-in-fact is empowered to act on behalf of another individual in various matters, including business, financial, and personal affairs.
- This designation is typically made via a power of attorney, granted by the principal.
- An attorney-in-fact does not have to be a lawyer; they are distinct from a legal attorney and need only act within the authority provided by the power of attorney.
- Courts may appoint an attorney-in-fact in cases where the principal is incapacitated.
Attorney-in-Fact and Power of Attorney
The principal usually appoints an attorney-in-fact through a power of attorney document, enabling the attorney-in-fact to make decisions and take actions on their behalf. Duties can include signing documents, managing financial accounts, or selling property.
An attorney-in-fact must act in the principal’s best interests and follow any specified guidelines. They must remain confidential and maintain records of all actions undertaken on the principal’s behalf.
Types of Power of Attorney
Two primary types of power of attorney exist for attorneys-in-fact:
- General Power of Attorney: Grants broad authority to conduct any business and make decisions, including financial ones, on the principal’s behalf.
- Limited Power of Attorney: Also known as “special power of attorney,” this restricts the attorney-in-fact to specific transactions or decisions as outlined in the document.
Choosing an attorney-in-fact requires careful consideration, given the breadth of power involved, even with limited authority.
The Powers and Duties of an Attorney-in-Fact
A general power of attorney enables the attorney-in-fact to perform actions the principal would typically take, like handling bank accounts, withdrawing funds, trading stocks, and more. A limited power of attorney restricts these actions to specific transactions or areas identified in the document.
Attorney-in-Fact vs. Attorney-at-Law
Though an attorney-in-fact and an attorney-at-law might sound similar, they serve different functions. An attorney-at-law (lawyer) offers legal advice and court representation, while an attorney-in-fact acts on behalf of the principal according to the power of attorney’s instructions.
Durable Power of Attorney
Normally, a power of attorney ends upon the principal’s death or incapacitation. However, a “durable” power of attorney remains in effect even if the principal becomes incapacitated, ensuring continued decision-making powers in matters like finance and healthcare.
This grant can be prearranged to activate upon a specific event, known as a “springing” power of attorney. Naming alternate agents can be wise, should the primary choice become unavailable.
Why Do You Need an Attorney-in-Fact?
The need for an attorney-in-fact can arise from convenience, such as when executing a transaction while unavailable, or necessity, like in the event of incapacitation due to health issues or travel.
Do They Need To Be a Lawyer?
No, an attorney-in-fact can be anyone you rely on—often a family member or close friend. However, appointing a lawyer is also an option, including professionals known as attorney-at-law.
Attorney vs. Attorney-in-Fact Differences
An attorney-in-fact acts based on the authority granted by a power of attorney, distinct from a lawyer who practices law. Understanding this distinction is key when appointing or interacting with an attorney-in-fact.
Are Power of Attorney and Attorney-in-Fact the Same?
Not at all; a power of attorney is the legal document that authorizes the attorney-in-fact, who then carries out specified duties for the principal. This document serves as proof of their role when making decisions or taking actions.
Liabilities of Being an Attorney-in-Fact
An attorney-in-fact is legally responsible for acting in the principal’s best interests. Failing to do so, or exceeding given authority, can result in liability for damages or losses. Familiarity with the power of attorney’s scope and seeking legal guidance if uncertain is crucial.
The Bottom Line
An attorney-in-fact makes decisions on behalf of another through power of attorney, a role bounded either generally or by specific tasks. Appointing one should be well-considered, favoring trusted individuals like family and friends. Clearly defining their authority, and setting provisions for acting with majority or unanimous consent, ensures their actions align with the principal’s wishes.
Related Terms: power of attorney, durable power of attorney, attorney-at-law, principal-agent relationship
References
- Legal Information Institute. “Attorney-in-Fact”.
- Utah State Courts. “Power of Attorney”.
- Legal Information Institute. “Attorney-in-Fact”.
- The Office of Minnesota Attorney General Keith Ellinson. “Probate and Planning: Power of Attorney”.
- HG.org Legal Resources. “Limited vs. General Powers of Attorney”.
- New York State Unified Court System. “Admissions to the New York Bar”.
- Merriam-Webster Dictionary. “Attorney-at-Law”.
- Upcounsel. “What Is Attorney-in-Fact vs. Attorney-at-Law?”
- New York State Senate. “New York General Obligations Law § 5-1511: Termination or Revocation of Power of Attorney; Notice”.
- Superior Court of Arizona in Maricopa County. “Revocation of Power of Attorney: Instructions”.
- New York City Bar Legal Referral Service. “Power of Attorney”.
- American Bar Association. “Estate Planning FAQs: Power of Attorney”.
- HG.org Legal Resources. “Limited vs. General Powers of Attorney”.
- Ohio Laws & Administrative Rules. “Ohio Revised Code Section 1337.092 Personal Liability”.
