A power of attorney is a legal document
authorizing a person to act on another's behalf in a
business or legal matter. The "principal" of
the power of attorney gives the "attorney in fact"
the power to act and provide legal signature on his
behalf in a single or general instance(s) depending
upon the authority granted in the power. The
former is usually called a "limited" or "special"
power of attorney. Often a power of attorney
is used to complete a real estate transaction where
one of the principals cannot be present.
The "attorney in fact" or agent has a fiduciary
responsibility to the principal of the power of
attorney and is required act in complete honesty and
loyalty to the principal.
Although a power of attorney may be an oral
agreement, it is common that a written document be
produced. A principal of law called the equal
dignity rule requires that parties afford the attorney
in fact the same formality as if he/she were the
principal of the power.
A power of attorney normally is valid until the
death or incapacitation of the principal. It may
be valid in spite of incapacitation but it must
specify so in the agreement. This is referred to
as a durable power of attorney. Durable powers
of attorney are often used to appoint an individual to
make health care decisions for another.
Another agreement called a "springing power of
attorney" can provide that the power only becomes
effective upon the happening of a specific event such
as the incapacitation of the principal. In this
event, the power of attorney is invalid until and
unless the principal becomes incapacitated.
The principal may revoke a power of attorney at any
time unless the power states that it is irrevocable.
In that case the power will remain active until the
death or incapacitation of one of the parties.