How to properly use a power of attorney
A power of attorney is a legal document that authorizes one person to act on behalf of another in the legal or business dealings of the person authorizing the other. This type of document is very relevant when, for example, someone needs to execute a commercial or legal matter but cannot do it for any reason. In the absence of the person, another person may be authorized to execute the matter through the use of a power of attorney, which in common law systems or civil law systems, authorizes another person to act on behalf of the person who authorizes. to the other. The authorizing person is known as the “principal” and the authorized person is called the “agent.” The agent can, on behalf of the principal, perform legal acts such as signing the name of the principal on the documents.
An agent is a trustee of the principal and, since this is an important relationship between the principal and the agent, the law requires that the agent be a person of impeccable integrity who will always act honestly and in the principal’s best interest. In the event that there is a contract between the agent and the principal for remuneration or another form of monetary payment made to the agent, said contract may be separate and in writing for this purpose. However, the power of attorney can also be verbal, although many institutions, banks, hospitals, and the US Internal Revenue Service require the agent to present a written power of attorney before it is enforced.
The “Equal Dignity Rule” is the principle of law that has the same requirements for the agent as for the principal. Suppose the agent has a power of attorney to sign the principal’s house deed of sale and that the deed of sale must be notarized by law. The power of attorney does not exempt the agent from the need to notarize the deed of sale. Your signature on the deed of sale must also be notarized.
There are two types of powers of attorney. One is the “special power of attorney” and the other is the “limited power of attorney”. The power of attorney can be specific for some special instance or it can be general and cover what the court specifies as its scope. The document will expire when the grantor (principal) dies. In the event that the principal is incapacitated due to a physical or mental illness, his / her power of attorney will be revoked, according to common law. There is an exception. In the event that the principal has specifically stated in the document that the agent can continue to act on his behalf even if the principal is incapacitated, then the power of attorney would continue to enjoy legal sanction.
In some of the US states, there is a “power of attorney” that is activated only in the event that the grantor (principal) becomes incapacitated or some future act or circumstance occurs. Unless the agreement has been made irrevocable, the principal can revoke the agreement by informing the agent that he is revoking the power of attorney.
The use of standardized power of attorney forms helps frame a legally sound and mutually beneficial relationship for the principal and agent. With the ease of use and out-of-the-box availability of such forms, it is strongly recommended that they be used when considering granting a power of attorney to someone. However, care must be taken not to allow unscrupulous people to defraud innocent people, such as the elderly, through ill-conceived arrangements.