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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

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.

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.

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.

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, without the power of an attorney-in-fact before the incapacity occurs. 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., 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.

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]

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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.

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

Irish Law

Irish law allows two types of powers of attorney:[5]

  • an ordinary Power of Attorney which ceases to be effective if the Donor becomes mentally incapacitated and,
  • an Enduring Power of Attorney which takes effect only on the mental incapacity of the donor.

Either kind of power of attorney may be a general power, giving the attorney general power to perform any legal act that the donor might do, or a specific power, giving the attorney power to perform a specific action (or a specific type of action) on the donor's behalf.[6]

Russian Law

In accordance with the laws of Russia can be as simple written form (a power of attorney for the right to control the car) and notarized. The power of attorney to act, requiring a notarial certificate (so-called «notarial form»), shall be certified by a notary. The power of attorney to act, not requiring a notarial certificate, have the force and without notarial certification.

Predstavitelstvo, Doverennost

Ukrainian Law

Predstavnytstvo see chapter 17 of Civil Code of Ukraine

  • by law
  • by agreement
  • commercial

See also

References


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

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.

Oral and written powers of attorney

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 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.

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.

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.) A person holding a general power of attorney was often referred to as an attorney general. 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 Power of Attorney with Durable Provisions or Enduring 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 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.[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, without the power of an attorney-in-fact before the incapacity occurs. 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., 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.

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]

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.

England & 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 (eg. 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 Attorney and registered with the Office of the Public Guardian. This new form of Power of Attorney was introduced in 2007 and replaced the former Enduring power of attorney, although EPAs validly made before the law changed are still valid. EPAs only need to be registered if the Donor has since lost capacity.

In 2003 the English Court of Appeal removed the right of an attorney to defend the grantee, stating: "The court controls its own procedures and principles for agency do not apply, so a power of attorney cannot confer a right to conduct litigation or of audience – Gregory v Turner, R (on application of Morris) v North Somerset Council [2003] EWCA Civ 183; [2003] 1 WLR 1149 (CA)."

Russian Law

In accordance with the laws of Russia can be as simple written form and notarized. The power of attorney to act, requiring a notarial certificate (so-called «notarial form»), shall be certified by a notary. The power of attorney to act, not requiring a notarial certificate, have the force and without notarial certification.

Predstavitelstvo, Doverennost Power of Attorney can be made revocable or irrevocable for a period less than 1 year or consideration.

Ukrainian Law

Predstavnytstvo see chapter 17 of Civil Code of Ukraine

  • by law
  • by agreement
  • commercial

See also

References


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