A power of attorney is a legal document that allows one person to act for another person, but the authority comes with duties and responsibilities. The giver of the authority is known as the principal, while the receiver is referred to as an agent. The agent has both a legal duty to the principal and the duties granted by the power of attorney document.
Once a principal selects an agent, she completes a legal power of attorney document. The document names the principal, the agent and all powers the agent receives. Any specific limits placed on the agent's power are listed on the document, as well as any alternate agents -- used if the first agent is unable to act -- and sometimes a termination date. The termination date is the day the agent no longer has the authority to act for the principal and is often used on a power of attorney that is granted for a specific reason only, such as the purchase of a home.
An agent's duties vary, depending on what types of powers the principal granted. Agents might be responsible for signing documents for specific transactions -- such as loan papers for a home or car -- and doing banking for the principal. An agent might have the power to sign various documents that require the signature of the principal and could represent the principal in front of the Internal Revenue Service. Agents might make gifts or donations on behalf of the principal, if given the specific authority to do so in the power of attorney document, or may have the power to do all of the above and more.
The agent has a legal duty to the principal; he must act in the principal's interests and not his own when acting as an agent. Agents should keep records of all duties performed on behalf of the principal in case the principal or a court asks for an accounting of the agent's activities. The power of attorney document typically must be filed in the county land records if the agent is signing real estate documents for the principal.
The power of attorney terminates at the death of the principal or in the case of a general Power of Attorney, when the principal revokes it. An agent can continue to act if the principal is incapacitated if that power is specified in the power of attorney document. An agent can resign, by notifying the principal in writing, if she no longer feels she can perform the duties .
Although a power of attorney typically begins once the principal signs the document, some powers of attorney don't begin until the principal can no longer act for himself. The power of attorney document itself states when the powers begin.
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