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What
is a Power of Attorney? Power of Attorney
is a document through which a
person (known as the
“principal”) can give
another person (known as the
“agent”) the authority
to act as the principal’s
legal representative and make
legal and/or financial decisions
on principal’s behalf.
Through a power of attorney, the
agent is given the power to make binding
legal and/or financial decisions
on behalf of the principal.
Therefore, one should be
extremely careful before
executing a power of
attorney. Make sure you
trust the person you are giving
the authority to act as your
agent and make sure you have a
clear understanding of the scope
and purpose of the power of
attorney you are about to
execute.
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What are General and
Specific Powers of Attorney?
A power of attorney can be
general or specific. A general
power of attorney could be unlimited in
scope and can give the agent the
authority to act as legal representative
in a broad range of matters.
Specific power of attorney, on the other
hand, is limited in scope and can be used
to give the agent the authority to act as
a legal representative of the principal
in a specific transaction or area.
For instance, a specific power of
attorney can be used to give the agent
the authority to act as a legal
representative and, therefore, execute
documents on behalf of the principal in a
particular real estate transaction.
Does the agent
have to be a licensed attorney?
The name "Power of
Attorney" may lead few to believe
that the person being given the authority
to act on behalf of the principal must be
a licensed attorney. In reality, however,
this is not true. None of the fifty
states has a requirement for the agent to
be a practicing attorney.
When is a power of
attorney terminated?
How long a power of
attoeny can last for is an apsect that is
completely within the discretion of the
principal at the time he/she executes the
document. The power of attorney can be
terminated by a competent principal at
any time. Alternatively, the
document can itself stipulate a specific
termination date. Or, the death of
the principal can terminate the power of
attorney. Lastly, a power of
attorney could be terminated upon
happening of a certain event provided in
the document (e.g., the principal turning
eighteen).
When does a power of
attorney become effective?
Unless the document
specifically provides a future date, a
power of attorney becomes effective at
the time it is signed by the
principal. A power of attorney can
also provide the effective date to be the
time in future when/if a certain event
happens (e.g., when/if the principal
becomes disabled and incapable of
managing his/her affairs).
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