An attorney-in-fact is the individual or group appointed to make decisions and act on behalf of another person, as outlined in a power of attorney document.
Many individuals opt to entrust family or close friends as attorneys-in-fact, while some choose professional fiduciaries who charge fees for their services.
Establishing Power of Attorney
An individual with power of attorney is given permission to act on behalf of another in case they become disabled and are incapable of making decisions themselves. Their duties typically cover real estate matters, banking transactions, government benefits such as retirement and healthcare billings as well as billing issues.
An POA is an invaluable way to ease family member’s anxiety if ever the time comes when they can no longer make decisions on their own. By selecting someone you trust and giving them power to carry out your wishes.
State law dictates that when creating a power of attorney, its agent must act in good faith and within their scope of authority granted. If they need any clarification regarding any applicable laws they should seek legal advice before making decisions themselves. They must also keep records of decisions made as well as transactions conducted, in addition to providing periodic accountings of their activities to their grantor.
Designating an Attorney-in-Fact
An agent, also referred to as an attorney-in-fact, named in a power of attorney document is responsible for carrying out specific responsibilities for another individual (known as their “principal”). Depending on the nature of their document, their role could include cashing checks or trading stocks on their principal’s behalf.
Grantors typically select someone they trust as their attorney-in-fact, such as a member of their family or trusted friend/colleague. It must possess both the expertise needed to act according to their wishes as well as possess relevant business, financial or other knowledge for carrying out these tasks effectively.
An attorney-in-fact typically receives some payment for their services; this should be discussed and resolved between both parties prior to finalizing a power of attorney agreement, to avoid disagreement and confusion later on. Furthermore, an experienced attorney-in-fact should keep clear records so as to prevent conflicts of interest arising if managing multiple accounts for one principal at once.
Record Keeping
An effective record keeping system can help businesses avoid many potential risks. It can assist them in meeting both laws and industry standards while at the same time minimizing leakage of confidential information to outside parties or business clients.
Before appointing someone as your representative, it is essential that they are familiar with the type of records you keep as well as any bank and tax requirements for recording expenses and income.
Your attorney-in-fact should have the ability to focus on details and deliver on commitments without becoming indifferent or distracted, otherwise reconsider their selection as your representative in this critical role.
Fees
Your attorney-in-fact typically does not need extensive legal experience to be an effective representative for you and should be reliable and capable of understanding all aspects of your financial life and legal documents.
As with any job, the role can be time-consuming and complex. It requires keeping detailed financial records, managing investments, and acting as proxy in business meetings.
Before selecting an attorney-in-fact, discuss with them their scope of duties and whether any compensation would be suitable. They may employ bookkeepers or accountants for additional assistance which they should also receive payment for.
Your attorney-in-fact must present documentation granting them power of attorney to third parties before they will accept his or her authority, such as banks. When withdrawing money or signing loan documents, banks require proof of this documentation before authorizing withdrawal or signing off on loan documents by your agent. He or she should also keep complete and detailed records so they can present them to you later for verification purposes.