What is “Power of Attorney?”

Power of Attorney is when one person gives another person the right to legally represent him or her.  The person accepting the Power of Attorney is called an "attorney-in-fact"; though this person does not, in fact, need to be a lawyer.  A real estate agent can act as an attorney-in-fact if you are out of state when the documents need to be signed.  A spouse can be an attorney-in-fact.  Occasionally the term "agent" or "representative" is used instead of attorney-in-fact.

Be cautious giving Power of Attorney, you place a lot of authority in another person's hands.  This isn't to say you shouldn't do it, just that you want to make sure your attorney-in-fact is reliable.

There are five basic types of Powers of Attorney.

1. Unlimited Power of Attorney. This grants a person complete authority over all of your affairs.  This includes financial as well as legal.  Some states may require the document spell out what powers are being transferred, but generally speaking, this is a very broad granting of powers.
2. Limited Power of Attorney. A limited Power of Attorney is used when you want to grant someone specific rights for a specific reason, such as someone to take care of your business while you are out of the country, or a real estate agent to close a deal in another city.  This should be a detailed document covering exactly what transactions the attorney-in-fact is authorized to conduct.
3. Durable Unlimited Power of Attorney. The "Durable" in this case is the same as the Unlimited Power of Attorney, with the addition of staying in effect if you are in some way incapacitated or disabled.  The standard Power of Attorney is automatically revoked if you die or are disabled.  The Durable Power of Attorney allows your attorney-in-fact to conduct your financial affairs if you are unable to.
4. Durable Limited Power of Attorney. Like the above, a Durable Limited Power of Attorney allows your attorney-in-fact to conduct specific business affairs for you, even if you are disabled.
5. Durable Power of Attorney for Healthcare.  Also called a healthcare proxy.  A Durable Power of Attorney for Healthcare is not the same as a living trust.   A Durable Power of Attorney for Healthcare does not state what kind of care you want if you incapacitated, it simply gives another person the power to make healthcare decisions for you.  You need a Healthcare Directive if you wish to state what care you do or do not wish to have. 

Another important item is the Revocation of Power of Attorney.  The Revocation of Power of Attorney ends all legal transfer of powers between you and your attorney-in-fact.  If the Power of Attorney was for a specific purpose and that has been fulfilled, get the revocation as soon as possible and make sure all interested parties get a copy. 

All forms of Power of Attorney call for two witness signatures, the signature of the attorney-in-fact, and the signature of the person granting the power, which must be notarized. 

If you don't have a Durable Power of Attorney then become incapacitated, a court proceeding is inevitable, even if you are married. 

Disclaimer: This website is not equivalent to legal advice, and should not be relied upon as such. Any specific questions concerning your legal rights should be presented your attorney.