What should you consider when serving as attorney in fact under a power of attorney?

By Melissa G. Nolan

When someone asks you to serve as “attorney in fact” under his or her “power of attorney” (a document designating who may act for a person either immediately or when future incapacity occurs), your first thought may be that you would be honored to serve, as it is a sign of the individual’s trust in you. However, your second thought may be that you are not willing to accept that responsibility, at least not without knowing more about what exactly it means.

An attorney in fact is designated under a power of attorney document to act as agent on behalf of the person who created the power of attorney. The person creating the power of attorney is known as the principal. The attorney in fact is authorized to make financial decisions, and take related actions, on behalf of the principal. The authorization to act for the principal may be effective immediately upon the principal signing the power of attorney document, or it may be “springing,” which means the authorization becomes effective at a specific time in the future, such as when the principal becomes mentally incapacitated.

Attorneys in fact may be given broad powers, or may be given very limited powers. Your authority to act as an attorney in fact is limited by the power of attorney document itself, so you will want to review that document closely to understand what your powers are. If you do not know whether you are authorized to take a certain action, you should discuss it with a lawyer prior to acting.

In acting as an attorney in fact, you are required to make decisions and act for the benefit of the principal, not for yourself. You must always act in the best interest of the principal. You are in a position of trust with the principal.  If you violate this trust, you could face liability.

Although you have a responsibility to act in the best interest of the principal, that does not require you to be perfect. So long as you remember to act in good faith, as a prudent person, only for the benefit of the principal, and in accordance with the powers given you in the power of attorney document, you likely will fulfill your duties as an attorney in fact.

If you have any questions about acting as an attorney in fact, or putting a power of attorney in place, the estate planning attorneys at Paule, Camazine & Blumenthal, PC can help.

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