Power of Attorney – What is it?

e0_d__0_PowerOfAttorney Besides being a 1995 crime drama, what exactly is a “power of attorney”?  Essentially, it is a document that gives someone else authority to act on your behalf.  It can be very broad and allow the person to do any legal act that you can do, or it can be limited to a one-time transaction (such as the closing on a real estate deal).

Probably the most important thing to consider when drafting a POA is choosing your agent (also called “attorney-in-fact” and not to be confused with an actual attorney-at-law or lawyer) very carefully.  You are legally bound by the actions of your agent when a third party relies upon the document in good faith.  For example, if your POA document is broad enough to allow your agent to borrow money from the bank in your name and he or she does so and then absconds with the money to another country, you are likely stuck paying the money back to the bank.  Of course, you can sue your agent for breach of his or her fiduciary duty (assuming you can get service on them in the Caribbean or wherever they are), but it might not do you much good.

Powers of Attorney are generally revocable at your option (assuming that you are still alive and legally competent) by simply giving written notice to your agent of your decision to revoke the POA.  However, you should also give notice of the revocation to any person or entity that you know or suspect your agent has dealings with so that they will not rely on the POA in the future.  Otherwise, they might rely on the revoked POA in good faith and you might still be bound as in the previous example with the bank.

Much more can be said about powers of attorney.  Keep checking back here for more articles to come!


Published by: David A. Bailey on October 5th, 2013 | Filed under Uncategorized

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