Power of attorney
Encyclopedia
A power of attorney or letter of attorney is a written authorization to represent or act on another's behalf in private affairs, business, or some other legal matter. The person authorizing the other to act is the principal, grantor, or donor (of the power), and the one authorized to act is the agent
, donee, or attorney or, in some common law
jurisdictions, the attorney-in-fact. Formerly, a power referred to an instrument
under seal while a letter was an instrument under hand, but today both are under hand (i.e., signed by the donor), and therefore there is no difference between the two.
is a lawyer
— someone licensed to practice law in a particular jurisdiction. The Uniform Power of Attorney Act employs the term agent.
In most other common law jurisdictions, lawyers are not called attorneys. In those jurisdictions the term "attorney" is used instead of "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 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.
.
s, bank
s 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. In some countries and situations, an electronic power of attorney
can also be considered valid.
in most U.S. jurisdictions), then the authorization for the other person to sign the sales contract and deed must be in writing too.
increases the likelihood of withstanding such a challenge. However, such notarization is not always necessary for such a document to be considered legal — in California and in South Carolina a power of attorney is considered legally valid by the state if it is signed by the principal, by the agent, and then either by two witnesses OR by a single notary public; In Arizona and Illinois, a power of attorney requires notarization and the signature of at least one witness. Each state has specific process and it is important to confirm the most recent version.
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.)
, for example, unless the grantor (or principal) specifies that the power of attorney will continue to be effective even if the grantor becomes incapacitated. This type of power of attorney is called "power of attorney with durable provisions" in the United States or "enduring power of attorney
" elsewhere. In effect, under a durable power of attorney, the authority of the attorney-in-fact to act and/or make decisions on behalf of the grantor continues until the grantor's death.
" and, as such, the two terms are sometimes used interchangeably.
is a written statement of a person's health care and medical wishes but does not appoint another person to make health care decisions. Depending upon the jurisdiction, a health care power of attorney may or may not appear with an advance health care directive in a single, physical document. For example, the California legislature has adopted a standard power of attorney for health care and advance health care directive form that meets all the legal wording requirements for a power of attorney and advance health care directive in California. Compare this to New York State, which enacted a Health Care Proxy law that requires a separate document be prepared appointing one as your health care agent.
, medical doctors will often not reveal information relating to capacity of the principal unless the power of attorney specifically authorizes them to do so.
Determining whether or not the principal is "disabled" enough for the power of attorney to "spring" into action is a formal process. Springing powers of attorney are not automatic, and institutions may refuse to work with the attorney-in-fact. Disputes are then resolved in court, which is of course a costly, and usually unwanted, procedure.
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.
).
notes that proxy voting
involves granting a power of attorney. The term "proxy" refers to both the power of attorney itself and the person to whom it is granted.
and registered with the Office of the Public Guardian
. This new form of power of attorney was introduced in 2007 under the Mental Capacity Act 2005
and replaced the former enduring power of attorney
, although EPAs correctly made before the law changed are still valid. EPAs only need to be registered if the Donor has since lost capacity.
It should be noted that many of the provisions in the earlier paragraphs above use terminology different from either common usage in the UK or terms used in the Mental Capacity Act 2005
. Examples are enduring power of attorney, advance directive, and notary public.
There is a requirement of notarization of POA in the case of making a contract which is subject to a special state registration (particularly, real property) as well as when a POA is granted by a natural person, not legal entity.
POA, as stated in the Civil Code of Russian Federation, must contain a date issue. A POA without such information is void.
Predstavitelstvo, Doverennost
Power of attorney can only be made revocable. The grantor is entitled to cancel the POA at any time at his sole discretion. Any waiver of this right is void, as it is stipulated by Civil Code.
Agency (law)
The law of agency is an area of commercial law dealing with a contractual or quasi-contractual, or non-contractual set of relationships when a person, called the agent, is authorized to act on behalf of another to create a legal relationship with a third party...
, donee, or attorney or, in some common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
jurisdictions, the attorney-in-fact. Formerly, a power referred to an instrument
Legal instrument
Legal instrument is a legal term of art that is used for any formally executed written document that can be formally attributed to its author, records and formally expresses a legally enforceable act, process, or contractual duty, obligation, or right, and therefore evidences that act, process, or...
under seal while a letter was an instrument under hand, but today both are under hand (i.e., signed by the donor), and therefore there is no difference between the two.
Attorney-in-fact
The term attorney-in-fact is used in several states of the United States in place of the term agent in power of attorney documents and should be distinguished from the term attorney-at-law. An attorney-at-law in the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
is a lawyer
Lawyer
A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
— someone licensed to practice law in a particular jurisdiction. The Uniform Power of Attorney Act employs the term agent.
In most other common law jurisdictions, lawyers are not called attorneys. In those jurisdictions the term "attorney" is used instead of "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 in their dealings with each other. If the attorney-in-fact is being paid to act for the principal, the contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
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
Reciprocal inter-insurance exchange
A reciprocal inter-insurance exchange, is an insurance company referred to in United States state legislation as either a reciprocal insurance exchange, a reciprocal interinsurance exchange, or perhaps most properly a reciprocal inter-insurance exchange and is managed by an attorney in fact...
(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.
Capacity of the grantor
The person creating a power of attorney, also known as the "grantor", can only do so when he/she has the requisite mental capacity. However, if the donor loses capacity (from, for example, Alzheimer's disease or a head injury in a car crash) to grant permission at any time after the power of attorney has been created, the document will probably stop being effective and enforceable unless the grantor specifically states in that power of attorney that he/she wishes the document to remain in effect even if he/she becomes incapacitated. This type of power of attorney, that stays in effect even after the grantor becomes incapacitated, is commonly referred to as a durable power of attorney. It is important to note that if someone is already incapacitated, it is not possible for that person to sign and/or execute a valid power of attorney. A person must have capacity in order to validly sign legal documents, including a power of attorney. If a person does not have the capacity to execute a power of attorney (and does not already have a durable power of attorney in place), often the only way for another party to act on their behalf is to have a court impose a conservatorshipConservatorship
Conservatorship is a legal concept in the United States of America, where an entity or organization is subjected to the legal control of an external entity or organization, known as a conservator. Conservatorship is established either by court order or via a statutory or regulatory authority...
.
Oral and written powers of attorney
Depending on the jurisdiction, a power of attorney may be oral and whether witnessed or not, will hold up in court, the 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 hospitalHospital
A hospital is a health care institution providing patient treatment by specialized staff and equipment. Hospitals often, but not always, provide for inpatient care or longer-term patient stays....
s, bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
s and, in the United States, the Internal Revenue Service
Internal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...
, 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. In some countries and situations, an electronic power of attorney
Electronic Power of Attorney
Electronic Power of Attorney is the means in Portuguese law that allows someone to provide a proxy or a civil representative with the necessary powers, granted by electronic means and using the technology in place and the Cartão de Cidadão . This power of attorney has the same legal value as the...
can also be considered valid.
Equal dignity rule
The equal dignity rule is a principle of law that requires an authorization for someone performing certain acts for another person to have been appointed with the same formality as required for the act the representative is going to perform. This means, for example, that if a principal authorizes someone to sell the principal's house or other real property, and the law requires a contract for the sale of real property to be in writing (which is required under the Statute of FraudsStatute of frauds
The statute of frauds refers to the requirement that certain kinds of contracts be memorialized in a signed writing with sufficient content to evidence the contract....
in most U.S. jurisdictions), then the authorization for the other person to sign the sales contract and deed must be in writing too.
Signatures and notarization
In order for a power of attorney to be a legal document it must be signed and dated at a minimum by the principal. This alone, however, is not usually considered sufficient if the legality of the document is ever challenged by a third party. Having the document reviewed and signed (and often stamped) by a notary publicNotary public
A notary public in the common law world is a public officer constituted by law to serve the public in non-contentious matters usually concerned with estates, deeds, powers-of-attorney, and foreign and international business...
increases the likelihood of withstanding such a challenge. However, such notarization is not always necessary for such a document to be considered legal — in California and in South Carolina a power of attorney is considered legally valid by the state if it is signed by the principal, by the agent, and then either by two witnesses OR by a single notary public; In Arizona and Illinois, a power of attorney requires notarization and the signature of at least one witness. Each state has specific process and it is important to confirm the most recent version.
Types of power 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.)
Durable power of attorney
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 illnessMental illness
A mental disorder or mental illness is a psychological or behavioral pattern generally associated with subjective distress or disability that occurs in an individual, and which is not a part of normal development or culture. Such a disorder may consist of a combination of affective, behavioural,...
, for example, unless the grantor (or principal) specifies that the power of attorney will continue to be effective even if the grantor becomes incapacitated. This type of power of attorney is called "power of attorney with durable provisions" in the United States or "enduring power of attorney
Enduring power of attorney
An enduring power of attorney under English law is the legal authorization to act on someone else's behalf in a legal or business matter. From 1 October 2007 the EPA has been replaced by the two forms of lasting power of attorney , and no new EPAs can now be drawn up; however, one signed before...
" elsewhere. In effect, under a durable power of attorney, the authority of the attorney-in-fact to act and/or make decisions on behalf of the grantor continues until the grantor's death.
Health care power of attorney
In some jurisdictions, a durable power of attorney can also be a "health care power of attorney", which empowers the attorney-in-fact (proxy) to make health care decisions for the grantor, up to and including terminating care and ending life supports that are 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. In many jurisdictions, a health care power of attorney is also referred to as a "health care proxyHealth care proxy
A Health Care Proxy is an instrument that allows a patient to appoint an agent to make health care decisions in the event that the primary individual is incapable of executing such decisions. Once the document is drafted, the primary individual continues to be allowed to make health care decisions...
" and, as such, the two terms are sometimes used interchangeably.
Relationship with advance health care directive
Related to the health care power of attorney is a separate document known as an advance health care directive or "living will". A living willLiving will
An advance health care directive, also known as living will, personal directive, advance directive, or advance decision, are instructions given by individuals specifying what actions should be taken for their health in the event that they are no longer able to make decisions due to illness or...
is a written statement of a person's health care and medical wishes but does not appoint another person to make health care decisions. Depending upon the jurisdiction, a health care power of attorney may or may not appear with an advance health care directive in a single, physical document. For example, the California legislature has adopted a standard power of attorney for health care and advance health care directive form that meets all the legal wording requirements for a power of attorney and advance health care directive in California. Compare this to New York State, which enacted a Health Care Proxy law that requires a separate document be prepared appointing one as your health care agent.
Springing power of attorney
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. If a springing power is used, care should be given to specify exactly how and when the power springs into effect. As the result of privacy legislation in the U.S.Health Insurance Portability and Accountability Act
The Health Insurance Portability and Accountability Act of 1996 was enacted by the U.S. Congress and signed by President Bill Clinton in 1996. It was originally sponsored by Sen. Edward Kennedy and Sen. Nancy Kassebaum . Title I of HIPAA protects health insurance coverage for workers and their...
, medical doctors will often not reveal information relating to capacity of the principal unless the power of attorney specifically authorizes them to do so.
Determining whether or not the principal is "disabled" enough for the power of attorney to "spring" into action is a formal process. Springing powers of attorney are not automatic, and institutions may refuse to work with the attorney-in-fact. Disputes are then resolved in court, which is of course a costly, and usually unwanted, procedure.
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.
Standardized forms
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 agents have used powers of attorney to unscrupulously waste or steal the assets of vulnerable individuals such as the elderly (see elder abuseElder abuse
Elder abuse is a general term used to describe certain types of harm to older adults. Other terms commonly used include: "elder mistreatment," "senior abuse," "abuse in later life," "abuse of older adults," "abuse of older women," and "abuse of older men."...
).
Proxy voting
Robert's Rules of OrderRobert's Rules of Order
Robert's Rules of Order is the short title of a book containing rules of order intended to be adopted as a parliamentary authority for use by a deliberative assembly written by Brig. Gen...
notes that proxy voting
Proxy voting
Proxy voting has two forms: delegable voting and delegated voting, which are procedures for the delegation to another member of a voting body of that member's power to vote in his absence, and/or for the selection of additional representatives, as in the case with transitive proxies...
involves granting a power of attorney. The term "proxy" refers to both the power of attorney itself and the person to whom it is granted.
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.England and Wales
In English law, anyone with capacity can grant a power of attorney. These can be general (i.e., to do anything which can legally be done by an attorney), or relate to a specific act (e.g., to sell freehold property). A power of attorney is only valid while the donor has the capacity to ratify the attorney's actions, unless it is made in the form of a lasting power of attorneyLasting Power of Attorney
Lasting powers of attorney in England and Wales were created under the Mental Capacity Act 2005 of which copies are available online, and came into effect on 1 October 2007. The LPA replaced the former Enduring Powers of Attorney which were narrower in scope...
and registered with the Office of the Public Guardian
Office of the Public Guardian
The Office of the Public Guardian in Scotland, is a public body based in Falkirk as part of the Scottish Court Service, established in April 2001 following the passing of the Adults with Incapacity Act 2000.-History:...
. This new form of power of attorney was introduced in 2007 under the Mental Capacity Act 2005
Mental Capacity Act 2005
The Mental Capacity Act 2005 is an Act of the Parliament of the United Kingdom. Its primary purpose is to provide a legal framework for acting and making decisions on behalf of adults who lack the capacity to make particular decisions for themselves....
and replaced the former enduring power of attorney
Enduring power of attorney
An enduring power of attorney under English law is the legal authorization to act on someone else's behalf in a legal or business matter. From 1 October 2007 the EPA has been replaced by the two forms of lasting power of attorney , and no new EPAs can now be drawn up; however, one signed before...
, although EPAs correctly made before the law changed are still valid. EPAs only need to be registered if the Donor has since lost capacity.
It should be noted that many of the provisions in the earlier paragraphs above use terminology different from either common usage in the UK or terms used in the Mental Capacity Act 2005
Mental Capacity Act 2005
The Mental Capacity Act 2005 is an Act of the Parliament of the United Kingdom. Its primary purpose is to provide a legal framework for acting and making decisions on behalf of adults who lack the capacity to make particular decisions for themselves....
. Examples are enduring power of attorney, advance directive, and notary public.
Russian Law
In accordance with the laws of Russia, a power of attorney can be made both in written form and notarized. The power of attorney to act, requiring a notarial certificate (so-called «notarial form»), shall be certified by a notary.There is a requirement of notarization of POA in the case of making a contract which is subject to a special state registration (particularly, real property) as well as when a POA is granted by a natural person, not legal entity.
POA, as stated in the Civil Code of Russian Federation, must contain a date issue. A POA without such information is void.
Predstavitelstvo, Doverennost
Power of attorney can only be made revocable. The grantor is entitled to cancel the POA at any time at his sole discretion. Any waiver of this right is void, as it is stipulated by Civil Code.
Ukrainian Law
Predstavnytstvo see chapter 17 of Civil Code of Ukraine- by law
- by agreement
- commercial
See also
- Cestui que
- Delegata potestas non potest delegariDelegata potestas non potest delegariIn constitutional and administrative law, the principle delegata potestas non potest delegari states that ‘no delegated powers can be further delegated’. Alternatively, it can be stated delegatus non potest delegare, ‘one to whom power is delegated cannot himself further delegate that power’...
- Enduring power of attorneyEnduring power of attorneyAn enduring power of attorney under English law is the legal authorization to act on someone else's behalf in a legal or business matter. From 1 October 2007 the EPA has been replaced by the two forms of lasting power of attorney , and no new EPAs can now be drawn up; however, one signed before...
- Estate planningEstate planningEstate planning is the process of anticipating and arranging for the disposal of an estate. Estate planning typically attempts to eliminate uncertainties over the administration of a probate and maximize the value of the estate by reducing taxes and other expenses...
- EscrowEscrowAn escrow is:* an arrangement made under contractual provisions between transacting parties, whereby an independent trusted third party receives and disburses money and/or documents for the transacting parties, with the timing of such disbursement by the third party dependent on the fulfillment of...
- Lasting power of attorneyLasting Power of AttorneyLasting powers of attorney in England and Wales were created under the Mental Capacity Act 2005 of which copies are available online, and came into effect on 1 October 2007. The LPA replaced the former Enduring Powers of Attorney which were narrower in scope...
- Advance health care directive