Attorney-in-fact:
As
an agent, an attorney-in-fact is a fiduciary for the
principal, so the law requires an attorney-in-fact to
be completely honest with and loyal to the Principal
(commercial law)|principal in their dealings with each
other. If the attorney-in-fact is being paid to act
for the principal, the contract is usually separate
from the power of attorney itself, so if that contract
is in writing, it is a separate document, kept private
between them, whereas the power of attorney is intended
to be shown to various other people.
In
the context of the unincorporated reciprocal inter-insurance
exchange (URIE]) the attorney-in-fact is a stakeholder/trustee
who takes custody of the subscriber funds placed on
deposit with him, and then uses those funds to pay insurance
claims. When all the claims are paid, the attorney-in-fact
then returns the leftover funds to the subscribers.
The
term ''attorney-in-fact'' should not be confused with
the term ''attorney at law''. An attorney-at-law in
the United States is a lawyer—someone licensed
to practice law in a particular jurisdiction. In most
other common-law jurisdictions lawyers are not called
attorneys, and in those jurisdictions the term "attorney"
generally refers to either attorneys-in-fact or lawyers
from the United States.
Oral
and written powers of attorney:
A
power of attorney may be oral and whether witnessed
or not, will hold up in court, same as if it were in
writing. For some purposes, the law requires a power
of attorney to be in writing. Many institutions, such
as hospitals, banks and, in the United States, the Internal
Revenue Service, require a power of attorney to be in
writing before they will honor it, and they will usually
keep an original copy for their records.
Types
of powers of attorney:
A
power of attorney may be ''special'' or ''limited''
to one specified act or type of act, or it may be ''general'',
and whatever it defines as its scope is what a court
will enforce as being its scope. (It may also be limited
as to time.) Under the common law, a power of attorney
becomes ineffective if its grantor dies or becomes "incapacitated,"
meaning unable to grant such a power, because of physical
injury or [[mental illness]], for example, unless the
grantor (or principal) specifies that the power of attorney
will continue to be effective even if the grantor becomes
incapacitated (but any such power ends when the grantor
dies). This type of power of attorney is called a ''durable
power of attorney''.
In
some jurisdictions, a durable power of attorney can
also be a "Health Care Power of Attorney",
an advance directive which empowers the attorney-in-fact
(proxy) to make health-care decisions for the grantor,
up to and including terminating care and "pulling
the plug" on machines keeping a critically and
terminally ill patient alive. Health care decisions
include the power to consent, refuse consent or withdraw
consent to any type of medical care, treatment, service
or procedure. A living will is a written statement of
a person's health care and medical wishes but does not
appoint another person to make health care decisions.
New York State has enacted a Health Care Proxy law that
requires a separate document be prepared appointing
one as your health care agent.
People
with mental illness may prepare Psychiatric Advance
Directives (PADs in some U.S. states) or ''Ulysses contracts''
as they are called in Canada. Ulysses contracts are
powers of attorney that enable a patient to dictate
preferences for care before becoming incapacitated by
recurring mental illness. Although they are not used
very often, there is speculation in some of the academic
literature as to whether or not these advance directives
are empowering for people with mental illness (Journal
of Ethics in Mental Health 2006-1).
In
some U.S. states and other jurisdictions it is possible
to grant a ''springing power of attorney'';i.e., a power
that only takes effect after the incapacity of the grantor
or some other definite future act or circumstance. After
such incapacitation the power is identical to a durable
power, but cannot be invoked before the incapacity.
This may be used to allow a spouse or family member
to manage the grantor's affairs in case illness or injury
makes the grantor unable to act, while retaining the
power for without an attorney-in-fact before the incapacity
occurs. If a ''springing'' power is used, care should
be given to specifying exactly how and when the power
''springs'' into effect. As the result of [[Health Insurance
Portability and Accountability Act|privacy legislation
in the U.S., medical doctors will often not reveal information
relating to capacity of the principal unless the power
of attorney specifically authorizes them to do so.
Unless
the power of attorney has been made ''irrevocable''
(by its own terms or by some legal principle), the grantor
may revoke the power of attorney by telling the attorney-in-fact
it is revoked; however, if the principal does not inform
third parties and it is reasonable for the third parties
to rely upon the power of attorney being in force, the
principal may still be bound by the acts of the agent,
though the agent may also be liable for such unauthorized
acts.
Many
standardized forms are available for various kinds of
powers of attorney, and many organizations provide them
for their clients, customers, patients, employees, or
members. In some states statutory power of attorney
forms are available. Some individuals have used powers
of attorney to unscrupulously waste or steal the assets
of vulnerable individuals such as the elderly.
Power
of attorney in finance:
In
financial situations wherein a principal requests a
securities broker to perform extensive investment functions
on the principal's behalf, independent of the principal's
advice, power of attorney must be formally granted to
the broker to trade in the principal's account. This
rule also applies to principals who instruct their brokers
to perform certain specific trades and principals who
trust their brokers to perform certain trades in the
principal's best interest.
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The information on this web site is in no way intended
to be legal advice. Legal advice can only be obtained
by a licensed attorney who has the appropriate legal
skills and knowledge related to your specific circumstances.