Power of Attorney FAQ - United States


A Power of Attorney is a document that gives one person (the attorney-in-fact) the legal authority to act on behalf of another person (the principal) and make decisions when the principal is unable to do so in areas such as real estate, business, finance, and more.

A principal can allow their attorney-in-fact to make any of their decisions (using a General Power of Attorney) or some of their decisions (using a Specific Power of Attorney).

General Information About a Power of AttorneyWhat You Need to Know About an Attorney-in-FactWhen and Where a Power of Attorney Can Be UsedSigning and Filing a Power of Attorney
General Information About a Power of Attorney
What is a Power of Attorney?

A Power of Attorney, also called a POA, is a document where one person (the principal) appoints another person (the attorney-in-fact, also known as the agent or mandatary, depending on your state) to act on their behalf with respect to certain matters like finance, real estate, business, and more.

Finance

An attorney-in-fact can be given the power to make financial decisions in your stead, like making payments or closing accounts for you.

For example, if you were diagnosed with an illness that required long-term hospitalization, you could allow your attorney-in-fact to cancel unneeded bills like your cable and internet.

Your attorney-in-fact can hold other financial powers including the ability to control your bank account, cash checks, or transfer funds.

Legal

A Power of Attorney lets your attorney-in-fact handle your legal matters. This means they can commence lawsuits, communicate with your lawyer, file documents with the court, and more.

For example, if you were in the middle of a divorce but needed to go away for business, you could grant your attorney-in-fact the power to handle your divorce, including signing your paperwork.

You can restrict your attorney-in-fact’s powers and may want to restrict your attorney-in-fact’s ability to start lawsuits on your behalf.

Real Estate

Your attorney-in-fact can handle all of your real estate responsibilities. This includes selling, renting, trading, or managing any personal, residential, and commercial properties owned or rented in your name.

For example, if you’re renting out your house, you may want your attorney-in-fact to manage your tenants, including signing the lease agreement and issuing notices to enter.

Business

Your attorney-in-fact can manage your business, including making employment, budgetary, and investment decisions on your behalf. They can also be your proxy in meetings and vote as a shareholder in your stead.

For instance, if you own a small business but need to travel to another country for an extended period of time, you may want your attorney-in-fact to run your business and manage your employees, including making decisions regarding hiring and firing.

Other

A Power of Attorney can give your attorney-in-fact other powers, such as:

  • Maintaining the family (e.g. paying for your children’s tuition or medical expenses)
  • Hiring professionals (e.g. hiring a repairman)
  • Handling government tax requirements and benefits (e.g. filing and paying your personal or corporate taxes)
  • Selling, purchasing, or exchanging goods (e.g. selling your furniture or buying new furniture)
  • Donating to charities
  • Gifting money or items to family and friends
  • Making insurance-related transactions (e.g. cancelling your home or apartment insurance)
  • Managing assets in a Living Trust, an estate planning tool that allows you to transfer assets without going through probate
  • Changing retirement plans and accepting benefits (e.g. using your pension to pay bills like your mortgage)

You can set restrictions that prevent your attorney-in-fact from acting in certain areas by using a Specific Power of Attorney instead of a General Power of Attorney. Doing so limits what your attorney-in-fact can do in your stead.

For example, you may give your attorney-in-fact the authority to manage your finances but limit them to simply cashing checks and making payments.

What is a “principal” in a Power of Attorney?

The principal, also called the donor, is the person who appoints someone else to act for him or her. If you are creating a Power of Attorney and appointing an attorney-in-fact, you are the principal.

To be a principal, you must be:

  • An adult, meaning you’re over the age of majority and legally able to make your own decisions. (In most states, the age of majority is 18.)
  • Competent at the time of executing your Power of Attorney. This means you were mentally capable of making your own decisions when you signed your Power of Attorney and granted your attorney-in-fact’s powers.

What is an “attorney-in-fact”?

The person you (as the principal) appoint is called the attorney-in-fact, agent, or mandatary, depending on your state. This person acts on your behalf, making decisions regarding your affairs.

An attorney-in-fact can be anyone you choose (a spouse, child, relative, friend, or lawyer) as long as they are:

  • An adult, meaning they’ve attained the age of majority in their jurisdiction
  • Not filing for or undischarged from bankruptcy
  • Not the owner, operator, or employee of a nursing or extended-care facility where you’re a resident

An attorney-in-fact is not required to possess any specific qualities. However, it’s in your best interest to select someone who is trustworthy, knowledgeable, and capable of handling your affairs properly.

This person should have sufficient time, adequate financial management skills, and the ability to keep accurate financial records.

It is acceptable for your attorney-in-fact to also be your executor (the person you appoint to administer your Last Will and Testament) or a beneficiary (someone receiving a gift in your Last Will).

What is "incapacity"?

Incapacity means a person does not have the physical and/or mental ability to manage their affairs.

Your capacity affects the creation of your Power of Attorney in that you must be mentally capable of making your own decisions at the time of creating the document for it to be valid.

Your capacity also impacts when your Power of Attorney ends. While an Ordinary Power of Attorney will cancel automatically if you become incapacitated, a Durable Power of Attorney will remain in effect even after you become incapacitated.

Why should I have a Power of Attorney?

There are many reasons why someone would want to create a Power of Attorney. For example, you may wish to create a Power of Attorney if:

  • You are going to be away from your home for work or travel for an extended period of time.
  • You have been diagnosed with a serious illness and need to prepare for possible incapacitation.
  • You are approaching old age and wish to be prudent.
  • You are making estate or retirement plans.

A Power of Attorney is important to have in the event of unforeseen circumstances. For example, if you suddenly become ill or are involved in a serious accident, having a Power of Attorney in place will allow an attorney-in-fact to manage your affairs until you are better.

Remember, you can’t create a Power of Attorney after you’re incapacitated (which is usually when it’s needed the most), so it’s a good idea to prepare and create this document before something happens.

What are the types of Power of Attorney forms?

There are five terms used to describe a Power of Attorney: Ordinary, Durable, General, Specific, and Springing.

Ordinary and Durable Powers of Attorney apply to different situations and factor in the principal’s competency. General and Specific Powers of Attorney describe what powers an attorney-in-fact has in either an Ordinary or a Durable Power of Attorney document. A Springing Power of Attorney modifies when an Ordinary or Durable Power of Attorney comes into effect.

In other words, all Power of Attorney documents are either Ordinary or Durable. The terms General, Specific, and Springing simply alter how and when the document is used.

It’s important to know the differences between the documents and to make sure you have the right Power of Attorney for your situation.

Ordinary Power of Attorney

An Ordinary Power of Attorney is created when the principal is mentally competent and capable of acting for themselves but is unable to do so. An Ordinary Power of Attorney is valid as long as the principal is competent (meaning they are capable of making their own decisions and are not incapacitated). An Ordinary Power of Attorney can start immediately or on a date of your choosing (i.e. Springing Power of Attorney).

For example, if your employer asks you to go to Argentina on business for six months, you can execute an Ordinary Power of Attorney to allow a trusted friend to manage your home, business, and other affairs while you’re away. Moreover, your Ordinary Power of Attorney can be springing, so that it comes into effect on the day you leave for Argentina as opposed to when the document is signed.

Keep in mind, however, some states (such as Florida) do not permit Springing Powers of Attorney.

Durable Power of Attorney

A Durable Power of Attorney, also called an Enduring Power of Attorney, must also be created when the principal is mentally competent. After it is created, this Power of Attorney is valid regardless if the principal is competent (meaning it will remain in effect even if the principal becomes incapable of making their own decisions). A Durable Power of Attorney is usable until it is revoked or the principal dies.

Normally, a Durable Power of Attorney form is used to protect a principal’s affairs in the event of an unforeseen circumstance. However, it is sometimes used when the principal is still capable of making their own decisions but is unable to do so.

This is because a Durable Power of Attorney goes into effect the moment it is executed, when the principal is still competent, unless the principal explicitly states in the document that it will go into effect on a specific date or upon the occurrence of an event (i.e. Springing Power of Attorney).

For instance, if you are diagnosed with a long-term illness like heart disease, you may have a lot to handle on top of your day-to-day affairs. You can execute a Durable Power of Attorney, effective immediately, to allow an attorney-in-fact to make decisions for you while you focus on your health. If you are incapacitated for any reason during this time, a Durable Power of Attorney will allow your attorney-in-fact to continue acting on your behalf.

Alternatively, you could create a Springing Durable Power of Attorney that comes into force only if you become incapacitated. This means your attorney-in-fact would only have authority to act if and when you are incapacitated.

General and Specific Powers of Attorney

The difference between General and Specific Powers of Attorney is whether the principal gives their attorney-in-fact the ability to carry out actions on all or part of their affairs.

In other words, a General Power of Attorney gives an attorney-in-fact the authority to make any of your decisions, whereas a Specific Power of Attorney gives an attorney-in-fact the authority to make decisions for a particular purpose (e.g. to buy or sell a piece of property).

Choosing a General or Specific Power of Attorney may depend on:

  • Who you choose as your attorney-in-fact. If you choose someone who isn’t good at managing finances, for example, you may want to restrict their powers.
  • Why you are signing a Power of Attorney. For instance, if you require one particular decision to be made and nothing else, you may want to restrict your attorney-in-fact so they can only act regarding that matter.

Springing Power of Attorney

A Springing Power of Attorney means the principal chooses when their Power of Attorney (either Ordinary or Durable) comes into effect, usually on a specific date or when you become incapacitated.

For example, if you asked your spouse to be your attorney-in-fact in the event of an unforeseen incident, you can sign a Springing Durable Power of Attorney that comes into effect only after you’re debilitated. This means your husband or wife will not have authority to act on your behalf until you are incapable of acting for yourself.

What is the difference between a Power of Attorney and a conservatorship?

A conservatorship, also called a guardianship, also relates to handling an incapacitated person’s affairs similar to a Durable Power of Attorney. The difference, however, is that conservators are generally authorized to act through a court order. They are usually appointed as a result of severe mental or physical incapacity and as such can also handle health care and living arrangements.

What is a Medical Power of Attorney?

A Medical Power of Attorney and a Health Care Directive, sometimes called a Living Will or Personal Directive, are documents that deal specifically with medical matters. These documents are generally created and used at the same time.

A Medical Power of Attorney is used to appoint a decisionmaker for your medical matters, and a Living Will or Health Care Directive allows you to plan your medical treatment, such as whether or not you would like to be resuscitated, in case you are unable to communicate your wishes due to incapacity.

The main difference between a Power of Attorney and a Medical Power of Attorney is simple: A Power of Attorney does not address your medical decisions whereas a Medical Power of Attorney does.

In short, a Power of Attorney allows someone to represent your financial, real estate, or business affairs while you are unable to, and a Medical Power of Attorney grants someone the authority to make medical decisions on your behalf.

It is recommended that you create both documents so that you can be sure to have representatives in place for both areas in the event of an emergency.

What You Need to Know About an Attorney-in-Fact
Does my attorney-in-fact have unlimited power?

No, an attorney-in-fact can only make decisions within the areas that the Power of Attorney addresses, such as handling a person’s business, legal, and real estate matters, finances, tax obligations, and more. Those powers can also be limited with a Specific Power of Attorney.

To appoint someone to make decisions in other areas, a different document or a court order is required.

For example, a Medical Power of Attorney is needed to appoint a decisionmaker for your medical matters, and a Health Care Directive, sometimes called a Living Will, lets you stipulate your medical care, like whether or not you would like to be put on life support, in case you are incapable of communicating your medical preferences.

Similarly, in incidents involving severe mental or physical incapacity, a court order is required to appoint a conservator to make medical decisions.

It’s also important to know that an attorney-in-fact is legally required to comply with the principal’s directions and failing to adhere to those directions, without reasonable cause, can make the attorney-in-fact liable for any damages that may result from their improper conduct.

Can I have multiple attorneys-in-fact in my Power of Attorney?

Yes, sometimes a principal will need to appoint two or more attorneys-in-fact to act at the same time or an alternate attorney-in-fact to act in the event that the original attorney-in-fact cannot fulfill their obligations.

If the principal requires two or more attorneys-in-fact to act at the same time, they must decide whether they will be "joint" or "joint and independent" attorneys-in-fact.

Joint attorneys-in-fact must act together. This means the attorneys-in-fact must agree before they can act and must act at the same time. If one of the attorneys-in-fact is unavailable, the other attorney-in-fact cannot act.

For example, let’s say you need to cancel a service (like your cable TV). If you’re incapacitated and have named two people as your joint attorneys-in-fact, they need to agree to cancel the account before any action can be taken.

Joint and independent attorneys-in-fact can act together or individually depending on the principal’s wishes. In this instance, the attorneys-in-fact can act without consulting one another. If one attorney-in-fact is absent, the other can still act.

Let’s say you need your attorneys-in-fact to pay a bill. If you have appointed two people as your joint and independent attorneys-in-fact, then one attorney-in-fact can pay the bill without consent from the other.

In a joint and independent situation, a principal can also assign distinctive powers to each attorney-in-fact.

For example, you could appoint one attorney-in-fact to manage your property and appoint the other attorney-in-fact to manage your financial affairs.

Delegating certain powers is a good idea, especially when you know that one person is skilled at something, such as budgeting, and the other has strengths in a different area, such as managing rental properties.

An alternate or substitute attorney-in-fact steps in when the original attorney-in-fact is unable or unwilling to take on that role, for instance if they move or pass away. This person can begin acting immediately without the principal having to create a new Power of Attorney.

It is recommended (but not necessary) for the principal to appoint an alternate attorney-in-fact. Keep in mind, however, that third parties (such as a bank or insurance brokerage) may require proof that the original attorney-in-fact is unable to act before accepting instructions from the alternate.

Do I need an alternate attorney-in-fact?

Appointing an alternate attorney-in-fact is not mandatory, but it is recommended in the event that your original attorney-in-fact is incapable or unwilling to act for you.

If your original attorney-in-fact cannot act for you and you do not name an alternate, you will need to create a new Power of Attorney to appoint another attorney-in-fact. If you do not appoint a new attorney-in-fact, the Power of Attorney is invalid until a new Power of Attorney is created.

If you are incapacitated and incapable of creating a new Power of Attorney, someone (like a relative or friend) can petition the court to appoint someone to act on your behalf, such as a new attorney-in-fact or conservator, sometimes called a guardian.

Because involving the courts can be time-consuming, it’s a good idea to include an alternate attorney-in-fact in your Power of Attorney.

What if my attorney-in-fact dies or becomes incapacitated?

If you appointed two or more attorneys-in-fact and one dies or becomes incapacitated, the surviving attorney(s)-in-fact will carry on.

If the sole attorney-in-fact dies or becomes incapacitated, the alternate attorney-in-fact, if there is one, can step in. If there is not, another attorney-in-fact needs to be appointed by signing a new Power of Attorney.

If a new attorney-in-fact needs to be appointed while you’re incapacitated, someone (like a friend or relative) can ask the courts to appoint someone to act on your behalf, such as a new attorney-in-fact or conservator.

In a Power of Attorney, should I pay my attorney-in-fact?

It is not mandatory for a principal to pay their attorney-in-fact. However, in some states, an attorney-in-fact is permitted to repay expenses and allocate a reasonable amount of compensation to themselves, unless the principal explicitly states otherwise in the Power of Attorney.

Should a principal nominate their attorney-in-fact as their conservator?

A conservator, also called a guardian, is a word used to describe the person who manages an incapacitated person. A conservator is responsible for that person’s physical care and may sometimes need to make decisions regarding health care.

A court will generally decide if and when a conservator is required and will appoint one. The courts will usually choose the person you wish to appoint unless the judge determines that the person you named is unfit to act on your behalf.

When and Where a Power of Attorney Can Be Used
What is "jurisdiction" and “governing law” in a Power of Attorney?

Jurisdiction often refers to a geographical location with its own laws, such as a state, territory, district, or country. For example, California is a jurisdiction in the United States.

However, jurisdiction can also refer to a political territory with governing authority over itself, which means that the territory has laws that apply specifically to it based on it being within that particular area. For example, a reserve would be considered a political territory with its own laws.

Governing law relates to the laws applied in a given jurisdiction as well as the laws surrounding a particular document. Most often, an activity or a document is governed by the laws of the jurisdiction where the matter takes place (unless the parties in the document deliberately choose for the document to be governed by the laws of another particular jurisdiction).

In some instances, it may be a good idea to appoint an attorney-in-fact who lives in a different jurisdiction than you.

For instance, if you live in North Carolina but require someone to look after a piece of your property located in Virginia, choosing an attorney-in-fact who lives in Virginia is a good idea so that they can properly manage the property under Virginian laws. A person from Virginia may also have a base understanding of their state’s laws, which will help them navigate any potential legal issues involving your property.

Does it matter where my Power of Attorney is executed?

The jurisdiction may change how the Power of Attorney is executed (meaning the number of witnesses and whether or not it should be notarized), so it is important to know this information before signing the document.

When does a Power of Attorney take effect?

A Power of Attorney, whether it is Ordinary or Durable, can take effect in one of three ways:

  • Immediately upon execution
  • By specifying a date in the Power of Attorney
  • Upon the occurrence of an event (such as disability or incompetence)

All Powers of Attorney take effect immediately upon signing unless they are described as Springing, meaning the principal specifies a commencement date or specific event. However, know that some jurisdictions do not allow Powers of Attorney to start on the occurrence of an event.

Keep in mind, the terms General and Specific only apply to the attorney-in-fact’s powers and do not affect when a Power of Attorney starts.

When does a Power of Attorney end?

An Ordinary Power of Attorney ends when the principal becomes mentally incapacitated, and both an Ordinary Power of Attorney and a Durable Power of Attorney will end if the principal dies or if the Power of Attorney is revoked.

General, Specific, and Springing are terms that simply modify an Ordinary or a Durable Power of Attorney and do not impact the end date.

To clarify further, the terms General and Specific only refer to whether or not you gave your attorney-in-fact authority to act on all or part of your affairs, and Springing only refers to whether or not your Power of Attorney comes into effect on a specific date or after a particular event.

A Power of Attorney can also include an end date, meaning the document will be automatically rescinded after that date has passed. Moreover, in some states (such as Alabama), if you’ve named your spouse as your attorney-in-fact, your Power of Attorney will end if you divorce.

A principal can also cancel their Power of Attorney at any time, so long as the principal is competent and the attorney-in-fact is notified in writing, using a Revocation of Power of Attorney. This document is used to retract a Power of Attorney and should be provided to any individual or organization (e.g. your attorney-in-fact, your bank, etc.) that was provided with the Power of Attorney.

How is a Power of Attorney revoked?

A Power of Attorney can be revoked in one of two ways:

A Revocation of Power of Attorney can be executed so long as the principal is mentally competent at the time of executing the document and the attorney-in-fact is notified in writing. Any third parties (such as a bank or insurance brokerage) that were provided the original Power of Attorney should also be notified of the revocation in writing.

In some situations, it may be a good idea to simply include an end date in your Power of Attorney so that the document is automatically rescinded after that date passes.

For example, if you created an Ordinary Power of Attorney to allow someone to care for your affairs while you’re out of the country, you could make the date that you return the end date of your Power of Attorney. That way, your attorney-in-fact’s powers are revoked when you return home, without you having to revoke the document manually.

All Powers of Attorney are revoked if the principal passes away.

Can my attorney-in-fact appoint a new attorney-in-fact for me?

No. If the attorney-in-fact named in a Power of Attorney cannot meet their obligations and there are no alternates, only the principal can appoint a new attorney-in-fact.

If the principal is incapacitated and the named attorney-in-fact wants to discontinue their authority to act, someone (like a friend or relative) can ask the court to appoint someone to act for the principal, such as a new attorney-in-fact or conservator.

Does a Power of Attorney expire?

A Power of Attorney does not have an expiration date unless the principal includes a termination date in their Power of Attorney form. In this instance, the Power of Attorney is invalid after that date has passed.

All Powers of Attorney are revoked if the principal passes away.

Can a Power of Attorney be used in another country?

A Power of Attorney that was executed in the United States can usually be used in another country as long as it is authenticated or legalized, meaning a government official has certified that the notary’s signature is authentic.

For more information on authenticating a Power of Attorney, contact the embassy for the country where you intend the Power of Attorney to be used or consult relevant government websites.

Signing and Filing a Power of Attorney
What does “execute” mean?

To execute a document means to sign it using the proper, legal procedure, which can change depending on the type of document.

For a Power of Attorney, the proper, legal procedure, depending on your state’s laws and the document’s purpose, is to sign in front of a witness and to have the document notarized.

Notarization is when a document is signed by a notary public (i.e. a person with the legal authority to certify documents).

For a Power of Attorney, usually at least one witness is required to watch the principal sign, and most matters involving property require notarization.

Be sure to check your state laws to make sure you are executing your document properly.

What makes a Power of Attorney legal?

To be valid, a Power of Attorney needs to meet certain requirements related to signing, witnesses, and notarization, and these requirements may be different depending on the jurisdiction.

If the attorney-in-fact needs to sell the principal’s property, notarization is usually required.

However, some institutions (such as banks) may have their own policies for signing, which can include notarization, and may refuse to accept documents that are not notarized. Therefore, it is recommended that a Power of Attorney always be notarized, regardless of whether or not it is required.

How do you sign a Power of Attorney form?

When it comes time for a principal to sign their Power of Attorney document, a witness (or witnesses), and notary, if required, must be present to watch the principal initial each page of the document and then sign it themselves using their legal signature (the signature they use to sign legal documents or bank checks).

After the principal initials and signs the Power of Attorney, the witness and notary, if required, must initial each page and sign in the principal’s presence.

In some jurisdictions, you might not be required to initial each page to execute a Power of Attorney legally. However, initially each page is a good practice as it confirms that the pages haven’t been modified.

Can a Power of Attorney be signed digitally?

Common practice is to sign using a pen. However, some people choose to sign legal documents using a digital signature.

As long as the Power of Attorney is properly executed (meaning each page is initialed, if required, and the document is witnessed when signed), then a digital signature may be acceptable. In this situation, however, it is important to know what is valid in your jurisdiction.

How should an attorney-in-fact sign documents for the principal?

There is no regulated way for an attorney-in-fact to sign documents. However, it is recommended that an attorney-in-fact clearly indicate the principal’s name and that they are acting as attorney-in-fact for that person.

Common practice is to write the principal's name and add the attorney-in-fact’s name, followed by their title (“attorney-in-fact”). For example: Andrew Wells, by William Pratt, Attorney-in-Fact.

An attorney-in-fact should have a copy of the Power of Attorney to demonstrate that they are capable of signing for the principal. In some instances, an attorney-in-fact may be required to sign an Affidavit (a statement of facts written under oath) to affirm that the Power of Attorney is valid (and has not been revoked) and that the principal is alive.

Where are Power of Attorney forms filed?

In most instances, a Power of Attorney is not filed. However, if the attorney-in-fact needs to manage property, then the document should be filed with the County Clerk or the Land Titles Office (depending on the jurisdiction).

For example, if the attorney-in-fact is authorized to sell the principal's home, the Power of Attorney will likely need to be filed. In this case, it will likely need to be notarized as well.

Where should I store my Power of Attorney?

It is recommended to store your Power of Attorney in a safe place such as a fireproof safe at home or at your lawyer’s office. Some people also provide their attorney-in-fact with a copy of the Power of Attorney.

Because a Power of Attorney could be required on short notice, say if the principal is unexpectedly hospitalized, it’s a good idea to keep at least one original Power of Attorney in a safe and secure place where your attorney-in-fact can access it quickly and easily, if needed.

You may also want to keep the original document with your lawyer, in case any of the copies you had in another location or with other individuals are lost or destroyed.

While you can keep your Power of Attorney in a safety deposit box, problems could arise if this is the only location your document is kept. For instance, a bank may need certain paperwork completed in order for your attorney-in-fact to open your safety deposit box. The bank may even require the original Power of Attorney (which would be located inside the safety deposit box) to give your attorney-in-fact the authority to open the box. Moreover, the bank may be closed when the document is needed.

It is not a good idea to keep the location of your Power of Attorney a secret because, without the original document, your attorney-in-fact may be unable to act on your behalf.

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