Attorney-In-Fact

What Is an Attorney-In-Fact?

An attorney-in-fact is a person who is authorized to act on behalf of another person, usually to perform business or other official transactions. The person represented usually designates someone as their attorney-in-fact by assigning power of attorney.

An attorney-in-fact is not necessarily a lawyer. In fact, attorneys-in-fact don't require any special qualifications at all. They can be a family member or close friend.

Understanding the Attorney-In-Fact

There are three types of powers of attorney granted to attorneys-in-fact: general, limited, and special. The general power of attorney grants the attorney-in-fact not only the right to conduct any business and sign any documents on behalf of the principal, but to make decisions, including financial decisions, on their behalf.

Under a limited power of attorney assignment, the attorney-in-fact can be authorized to conduct certain transactions and make some decisions, but not others. A special power of attorney is the narrowest, limiting the attorney-in-fact's authority to those specified in the document assigning power of attorney.

Anyone assigning power of attorney should take care to choose someone they trust.

The Powers and Duties of an Attorney-In-Fact

If the attorney-in-fact is designated as a general power of attorney, they are allowed to conduct any actions that the principal would reasonably take. This means an attorney-in-fact would be able to open and close bank accounts, withdraw funds, trade stocks, pay bills, or cash checks — all on behalf of the principal.

Under a limited power of attorney, the attorney-in-fact is granted broad powers in one area but not in others. For example, the attorney-in-fact could be authorized to carry out transactions at the direction of the principal, but not to make business or financial decisions.

If a principal has very specific needs for an attorney-in-fact, they can designate a special power of attorney. For example, the principal could grant the attorney-in-fact only the right to sign documents related to the pending sale of a specific piece of property if the principal will be unable to do so themselves.

Durable Power of Attorney

A power of attorney ends when a person becomes incapacitated unless the power of attorney is designated as a durable power of attorney. In the latter case, the attorney-in-fact can retains the power of attorney and can make decisions for the principal, including matters of finance and health care. Durable power of attorney can also be granted ahead of time, on condition that it takes effect only when the principal becomes incapacitated.