An attorney-in-fact is someone with power of attorney over another individual and can perform various tasks for them, including paying bills, managing investments, selling properties and providing legal representation. They are often also granted authority to negotiate settlements on their behalf or provide legal advice when necessary.
Selecting an attorney-in-fact can bring peace of mind knowing that in the event of incapacitation, your preferences will be respected. But it is crucial to fully comprehend their duties and responsibilities.
Duty of care
The duty of care is an ethical principle governing attorneys-in-fact. This legal principle stipulates that they act with good faith, exercise reasonable judgement, prioritize their principal’s interests over their own and avoid self-dealing and conflicts of interest.
Attorneys-in-fact are appointed by way of a legal document known as power of attorney, which grants them authority to make decisions and take actions on behalf of another in financial and legal matters. As part of this arrangement, they must abide by any instructions set out within their document as well as laws or regulations applicable to their specific area of expertise.
An attorney-in-fact must also keep all matters concerning their principal confidential, including private information and financial records. They should inform their principal of all actions taken as attorney-in-fact in their capacity; failing to do so may result in negligence claims being filed against them if these duties aren’t fulfilled properly, so anyone considering appointing one must consult a legal malpractice lawyer beforehand in order to understand both responsibilities and rights.
Duty of loyalty
A Power of Attorney (POA) is an essential legal document that grants someone trusted the authority to manage your finances and legal documents if you become incapacitated. Your Attorney-in-Fact, who does not need to be a lawyer, may perform tasks such as paying bills, cashing checks and managing bank accounts on your behalf as well as communicating with any lawyers regarding legal issues you are involved in.
Attorney-in-facts must always act in their principal’s best interest and be loyal, which means avoiding any self-dealing or apparent conflicts of interest in managing financial and legal affairs. This duty can be enforced via both internal mechanisms like corporate governance and external regulatory bodies; to best meet it, consider engaging an estate planning specialist for assistance on issues like trust creation, tax planning, healthcare directives etc.
Duty of prudence
Prudence is one of the primary duties an attorney in fact should uphold, which means they should take great care with your property and money, making prudent investment decisions based on your individual needs, desires, and circumstances while avoiding risky investments that could cause you harm.
Disclosure is another duty that fiduciaries owe their beneficiaries. This requires providing information without endangering anyone’s interests; for instance, keeping records of investments and financial transactions to comply with ERISA regulations is key for fiduciaries.
Additionally, attorneys-in-fact must disclose any conflicts of interest or potential breaches of fiduciary duty to their principals. Furthermore, they must keep accurate records that can be presented upon request by principals or interested parties, and act in accordance with instructions received from principals while acting in their clients’ best interest.
Duty of disclosure
An attorney-in-fact is defined as any individual authorized to act on behalf of another, typically through their principal. While an attorney-in-fact doesn’t need to be legal counsel themselves, their powers will depend upon what powers are detailed in a power of attorney document.
Attorney-in-facts must take great care to avoid conflicts of interest, including avoiding transactions that would benefit themselves personally and activities that conflict with those expected by their principal.
John was living abroad and appointed his brother Alex as his attorney-in-fact to manage his finances. Unfortunately, Alex was no longer able to fulfil this role so John prepared a power of attorney document revoking Alex’s authority and legally designating Emma as his new Attorney in Fact. John then informed all relevant banks and entities of this change – an act both legal and ethical as a lawyer must keep accurate records of their activities.
