Attorney-in-Fact: Types, Powers, and Responsibilities

Key takeaways
* An attorney-in-fact (agent) is a person authorized by a power of attorney (POA) to act on behalf of a principal in legal, financial, or personal matters.
* A POA can be general (broad authority) or limited/special (restricted to specific acts).
* A durable POA remains effective if the principal becomes incapacitated; a springing POA takes effect on a specified triggering event.
* An attorney-in-fact need not be a licensed lawyer but has fiduciary duties and can be held liable for misuse or actions beyond authority.
* State laws govern formality, witnessing, notarization, and the scope of authority.

What is an attorney-in-fact?

An attorney-in-fact is an individual appointed by a principal through a power of attorney to perform tasks and make decisions on the principal’s behalf. Common duties include managing bank accounts, signing documents, paying bills, handling investments, or completing a specific transaction. The agent must act according to the POA document and in the principal’s best interests.

Power of attorney and the agent relationship

A power of attorney is the legal instrument that creates the attorney-in-fact’s authority. The POA specifies:
* Who the agent(s) are
* The scope of authority (broad or limited)
* Whether the POA is durable or springs into effect upon a future event
* Any rules for multiple agents (e.g., majority vs. unanimous decisions)

The agent generally must keep records, maintain confidentiality, and follow any instructions in the POA.

Types of power of attorney

• General POA: Grants broad authority to handle most financial and legal matters on the principal’s behalf.
• Limited (special) POA: Restricts authority to specific tasks, dates, or transactions (for example, closing a particular real estate sale).
• Durable POA: Remains effective if the principal becomes incapacitated.
• Springing POA: A durable POA that becomes effective only when a specified condition (often incapacity) occurs.

Powers and duties of an attorney-in-fact

Depending on the POA’s language, an agent may:
* Manage bank and investment accounts
* Pay bills and taxes
* Buy, sell, or transfer property
* Sign contracts
* Make health-care or personal-care decisions (if specifically authorized)

Core duties include:
* Acting in the principal’s best interests (fiduciary duty)
* Avoiding conflicts of interest
* Staying within the authority granted by the POA
* Keeping accurate records and providing accounting if requested

Attorney-in-fact vs. attorney-at-law

An attorney-in-fact is not necessarily a lawyer. An attorney-at-law (licensed lawyer) practices law, gives legal advice, and represents clients in court. An attorney-in-fact performs transactional or decision-making tasks for a principal under a POA and does not need a legal license to do so.

Liability and risks

Agents can be held legally and financially liable for:
* Breaching fiduciary duties (self-dealing, conflicts of interest)
* Acting outside the scope of the POA
* Negligence that causes the principal a loss

To reduce liability, agents should follow the POA precisely, document actions, obtain professional advice when appropriate, and avoid transactions that create perceived or actual conflicts.

When a POA ends

A POA typically ends when:
* The principal dies
* The principal revokes it in writing
* The POA’s stated purpose is fulfilled or its expiration date passes
* A court invalidates it

A durable POA, by contrast, continues after the principal’s incapacity unless revoked or terminated by other legal means.

Choosing an attorney-in-fact — practical tips

• Pick someone trustworthy, organized, and willing to act.
• Name successor agents in case the primary cannot serve.
• Specify decision rules if appointing multiple agents (majority vs. unanimity).
• Tailor the POA to the needed powers—don’t overgrant authority.
• Follow state formalities: many jurisdictions require notarization and witnesses.
• Require periodic accounting or reporting if appropriate.
• Consult an attorney for complex matters (real estate, business interests, or health-care decisions).

Conclusion

An attorney-in-fact can provide essential help managing finances, legal matters, and personal decisions when the principal cannot or prefers not to act. Clear drafting of the power of attorney, careful selection of the agent, and adherence to duties and state requirements are key to protecting the principal’s interests and limiting the agent’s liability.