Understanding The Power Of Attorney

                                                                                         

The power of attorney is a legal document through which you gain legal power to act on behalf of the person who has emitted the power of attorney. Used in a wide variety of activities and sectors, such as sales, business incorporation, health care and more. In essence, there are two main types of power of attorney, one that refers to the financial sector and one that refers to health care. In the case of the financial power of attorney, these documents are used to empower agents to act on behalf of the person emitting the document which is unable to act on his own behalf in cases where presence is needed. Situations include dealing with financial issues, starting business deals, starting a business incorporation, and so on.

A health care power of attorney is used when a third party is needed to act on a person’s behalf in health matters, such as dealing with health care agencies, doctors, health care centers. Granting a person power of attorney entails a certain level of trust that needs to be established prior to drafting a power of attorney. In sensitive cases business incorporation, important assets, or medical decisions, the decision making process needs to be complete and exhaustive, so that it removes any shadow of doubt because there have been numerous cases when those entrusted with power of attorney have gravely abused their newly acquired positions.

The appointee is called ‘attorney in fact’ or agent and can be entrusted with various levels of power through the use of the various types of powers of attorney. The main types of power of attorney that exist in relation to the level of power that is to be entrusted are the general power of attorney and the specific power of attorney. As you may have already guessed, the general power of attorney gives the ‘attorney in fact’ full and exhaustive power for a virtually limitless duration of time. The ‘attorney in fact’ may act in the behalf of the person entrusting him with power of attorney in almost every aspect of that person life, such as financial decisions.

The general power of attorney becomes void when revoked by the owner or in cases when that person’s health has gravely deteriorated. The specific power of attorney only allows the ‘attorney in fact’ to carry out specific assignments and only represent the person offering the power of attorney in situations carefully stipulated in the document. For example, the ‘attorney in fact’ can perform an action as important as business incorporation, but cannot sign even the most insignificant document if it is not stipulated in the power of attorney.

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