Power of Attorney
Power of Attorney is an authorization to act on someone else's behalf in legal, business, or financial matters. The person authorizing the other person to act is called the "Principal". The person authorized to act on behalf of the principal is called the "Attorney-In-Fact" or "Agent".
Power of Attorney is very broad and provides extensive powers to the attorney-in-fact. Some of the powers you (as the principal) can bestow upon your agent include:
- Handling bank transactions
- Entering safety deposit boxes
- Handling transactions involving U.S. securities
- Buying and selling real and personal property
- Purchasing life insurance
- Exercising stock rights
- Filing tax returns
- Handling matters related to government benefits
- Entering into contracts
- Maintaining and operating certain business interests
- Employing professional assistance
- Making gifts
- Making transfers to revocable ("living") trusts
- Disclaiming interests
A Power of Attorney is usually used by your agent to handle your financial affairs during any period of time when you are unable to do so. For example, when you are traveling out of the state or country or when you are physically or mentally unable to handle your affairs, your durable power of attorney permits your agent to conduct your business for you.
You may also want to limit the powers given to your agent by scope or by duration. A Limited Power of Attorney specifies the powers given to your agent for a certain period of time. For example, you may wish to authorize your agent only to sell a car on your behalf.