POWER OF ATTORNEY

A power of attorney (POA)
or letter of attorney in 
common law systems or 
mandate in civil law systems is 
an authorization to act on 
someone else's behalf in a legal 
or business matter. The person 
authorizing the other to act is 
the principal, granter or donor 
(of the power), and the one 
authorized to act is the agent, 
the attorney-in-

fact [1], or in many Common 
Law jurisdictions, simply the 
attorney.

Contents

[hide]

1 Attorney-in-fact

2 Oral and written powers of 
attorney

3 Equal dignity rule

4 Types of powers of attorney

4.1 Power of attorney in finance

4.2 UK Law

[edit] Attorney-in-fact

The term attorney-in-fact is 
commonly used in the United 
States, to make a distinction 
from the term attorney at law. 
An attorney-at-law in the 
United States is a lawyer-
someone licensed to practice 
law in a particular jurisdiction.

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.

[edit] Oral and written 
powers of attorney

A power of attorney may be 
oral and whether witnessed or 
not, will hold up in court, 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 hospitals, banks 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.

[edit] 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 Frauds" in most U.S. 
jurisdictions), then the 
authorization for the other 
person to sign the sales 
contract and deed must be in 
writing too. 

[edit] Types of powers 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.) 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 
illness, for example, unless the 
grantor (or principal) specifies 
that the power of attorney will 
continue to be effective even if 
the grantor becomes 
incapacitated (but any such 
power ends when the grantor 
dies). This type of power of 
attorney is called a durable 
power of attorney.

In some jurisdictions, a durable 
power of attorney can also be 
a "Health Care Power of 
Attorney", an advance directive
which empowers the attorney-
in-fact (proxy) to make health-
care decisions for the grantor, 
up to and including terminating 
care and "pulling the plug" on 
machines 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. [2] A living 
will is a written statement of a 
person's health care and 
medical wishes but does not 
appoint another 

person to make health care 
decisions. [3] New York State 
has enacted a Health Care 
Proxy law that requires a 
separate document be 
prepared appointing one as 
your health care agent.

People with mental illness may 
prepare Psychiatric Advance 
Directives (PADs in some U.S. 
states) or Ulysses contracts as 
they are called in Canada. 
Ulysses contracts are powers of 
attorney that enable a patient 
to dictate preferences for care 
before becoming incapacitated 
by recurring mental illness. 
Although they are not used 
very often, there is speculation 
in some of the academic 
literature as to whether or not 
these advance directives are 
empowering for people with 
mental illness (Journal of Ethics 
in Mental Health 2006-1).

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, while retaining 
the power for without an 
attorney-in-fact before the 
incapacity occurs. If a springing 
power is used, care should be 
given to specifying exactly how 
and when the power springs 
into effect. As the result of 
privacy legislation in the U.S., 
medical doctors will often not 
reveal information relating to 
capacity of the principal unless 
the power of attorney 
specifically authorizes them to 
do so.

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.

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 
individuals have used powers of 
attorney to unscrupulously 
waste or steal the assets of 
vulnerable individuals such as 
the elderly (see elder abuse).

Robert's Rules of Order 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. [4]

[edit] Power of attorney in 
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.

[edit] UK Law

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 (eg. 
to sell freehold property).

A normal Power of Attorney 
however ceases to have effect 
if the donor loses capacity. If it 
is the donor's intention for the 
Power to continue after they 
have lost capacity, then a 
"Lasting Power of Attorney" 
(LPA) should be granted. These 
came into being in 1 October 
2007, and replaced the simpler 
"Enduring Powers of Attorney" 
(EPA's) which had previously 
been used. LPA's were 
introduced by the government 
in order to reduce the potential 
for abuse that was a problem 
with the EPA system, and also 
to allow donors to grant 
attorneys the power to look 
after their welfare and not just 
their finances, which had not 
been possible under the EPA 
regime.

The new LPA regime is 
therefore a lot more 
complicated and expensive than 
the old EPA regime, with the 
average LPA costing in the 
region of £800 compared to the 
£100 charge for EPA's. However, 
it is perfectly possible to 
complete an LPA without 
consulting a solicitor; this 
dramatically reduces the overall 
cost than if a solicitor is 
appointed to complete the 
whole or any part of the 
process. A GP or social worker 
(for example) is able to be the 
Certificate Provider and they 
may not charge for this, or 
charge minimally. Having the 
legalities & implications 
explained by a trusted GP or 
other professional already 
known to the donor is also 
likely to be preferable.