Attorney in fact (What Does It Mean And Why It’s Important)

What an attorney in fact?

Who can act as an attorney in fact and what are the legal duties?

What is the difference with an attorney at law or power of attorney?

We will look at what is an attorney in fact, look at its legal definition, what are the duties of attorneys in fact, who can act as such, how attorneys sign documents, attorney in fact vs POA, compare it with an attorney in law, what can an attorney in fact do and more.

Be sure to read this entire article as we have awesome content in store for you!

We are so excited to begin!

Are you ready?

Let’s do this…

What is an attorney in fact

An attorney in fact is a person legally designated by another to act on his or her behalf.

You can designate an attorney in fact by signing a written power of attorney outlining the authorizations and powers of the designated person.

For instance, an attorney in fact can be authorized to:

  • Enter into a specific transaction
  • Sign contracts
  • Conduct business
  • Open bank accounts
  • Sign official documents
  • Perform a specific legal task 
  • Make financial decisions 
  • Trade stocks
  • Enter into a real estate transaction 
  • Make business decisions
  • Health care decisions 
  • Pay taxes
  • Make investments 
  • Transfer property 
  • Represent someone in court 

Attorneys in fact can be your friend, family, professional, lawyer, notary or anyone that you have confidence in to represent and act on your behalf.

It does not have to be a lawyer or an attorney at law. 

Attorney in fact definition

So what is the attorney in fact meaning?

According to Cornell Law School’s Legal Information Institute, attorney-in-fact is defined as:

An agent authorized to act on behalf of another person, but not necessarily authorized to practice law, e.g. a person authorized to act by a power of attorney. An attorney in fact is a fiduciary. Also known as attorney in fact or private attorney.
Author

What is notable with this definition of attorney in fact is that it’s a person authorized to act on behalf of someone by power of attorney.

Who can act as an attorney in fact

An attorney in fact is a person appointed to manage the financial and legal affairs of another.

This person can be a family member, a relative, a close friend, a lawyer, a professional or anyone the principal has confidence in to act as his or her attorney in fact (or agent).

Even though the term attorney in fact suggests “attorney”, the designated person does not necessarily have to be an attorney.

It can be anyone.

However, the person will have important responsibilities to make varying levels of decisions on your behalf.

You want to select a person who is trustworthy, you have confidence that he or she will act with integrity on your behalf and will be honest.

You can also choose co-agents or more than one attorney in fact to act on your behalf. 

In such a case, you may want to ensure you define the proper rules governing how decisions are made like will an agent have veto rights in case decisions are at a stalemate, are decisions made based on the rule of majority etc. 

The person named as an attorney in fact is not obligated to accept the mandate nor does he or she have to have a specific qualification to act as such.

What’s important is that you select someone that you really trust.

You may also want to appoint a successor attorney in fact in case the designated attorney in fact resigns, is no longer able to handle the mandate or has breached his or her fiduciary duty.

Power of attorney in fact

The attorney in fact acquires the legal authority to act on behalf of another person (the principal) in virtue of a power of attorney.

There are different types of powers of attorney (POA) that can be issued giving varying levels of authority to the attorney in fact, namely:

  • General power of attorney (GPOA)
  • Limited power of attorney (LPOA)
  • Special power of attorney (SPOA)
  • Durable power of attorney (DPOA)

A general power of attorney is a type of power of attorney giving broad powers to the attorney in fact.

With a GPOA, the attorney in fact is given the power to perform transactions and represent the person in general but also is given the power to make financial decisions in the best interest of his or her principal. 

Under a limited power of attorney, the principal grants the attorney in fact powers to perform certain transactions or handle specific legal tasks.

Finally, under a special power of attorney, the attorney in fact has a very specific mandate to do a very specific thing or sign a particular document and nothing else.

Duration of attorney in fact’s mandate

A principal can appoint an attorney in fact for a specific period of time or can appoint the person on an ongoing basis until he or she revokes the power of attorney or becomes incapacitated.

When a person appoints another for a specific period of time, the attorney in fact’s powers will lapse once the term of the POA has arrived.

If the power of attorney does not have a set expiration date or termination date, then the attorney in fact can exercise his or her powers until the POA is revoked by the principal or when the person becomes incapacitated or dies.

In the event of the principal’s death, the attorney in fact’s mandate is terminated in law.

Following death, the executor of the estate will be granted the powers to make decisions on behalf of the deceased.

In the event of the principal’s incapacity, the powers of the attorney in fact are terminated except if the principal had granted a durable power of attorney.

A durable power of attorney is granted in anticipation of a person becoming incapacitated.

In other words, if the principal becomes inapt, the attorney in fact’s powers remain in effect as the durable power of attorney is not terminated.

Duties of attorney in fact

The attorney in fact is a person nominated or appointed to act on your behalf during your lifetime under a power of attorney.

For instance, if you name someone as your “attorney in fact” under a durable power of attorney, you are essentially giving the rights and powers to that person to make decisions on your behalf.

The attorney in fact acts essentially as your agent or fiduciary.

It is someone who represents you when dealing with third parties and must act in your best interest.

Attorneys in fact have a duty to:

  • Act in your best interest
  • Act in good faith
  • Transact in a fair and honest manner on your behalf
  • Act with loyalty 
  • Avoid placing themselves in a conflict of interest 
  • Act with prudence and diligence 

The attorney in fact must not commingle his or her personal assets with that of the principal, keep accurate records of transactions performed and carry out his or her mandate with integrity.

It’s important that the attorney keep good records of the tasks carried out, transactions performed and decisions made.

This is not only necessary to demonstrate that the attorney in fact performed his or her duties but can to protect the attorney in fact against allegations of misappropriation, wrongful acts or breach of fiduciary duty.

Attorney in fact signature

There are different ways an attorney in fact signs on behalf of the principal.

You should make sure that you verify any specific requirements in your jurisdiction.

Typically, the attorney in fact can execute documents in the following ways:

  • Sign in the name of the principal and include his or her name as the power of attorney 
  • Sign in his or her name and indicate that it’s under a power of attorney 

For example, if the principal’s name is John Doe and the attorney in fact is Mary Smith, Mary can sign documents as:

  • John Doe represented by Mary Smith POA
  • Mary Smith POA for John Doe
  • Mary Smith attorney in fact for John Doe under POA dated _____

Attorney in fact vs attorney at law

An attorney in fact is a person named to represent another, make decisions for another or handle specific tasks during the principal’s lifetime under a power of attorney.

A power of attorney is a document granting the attorney in fact’s powers to act in the principal’s name.

An attorney in fact can be a relative, friend or someone close to you (it does not have to be a lawyer).

An attorney at law is a person trained in the field of law legally authorized to represent the legal interests of another.

An attorney at law will typically represent someone in the context of a personal and commercial transaction, business dealing, court proceedings and lawsuits. 

An attorney at law can be named as an attorney in fact.

However, an attorney in fact is not necessarily an attorney at law.

Attorney in fact vs power of attorney

What is the difference between attorney in fact and power of attorney?

An attorney in fact is a person appointed to handle certain tasks during the lifetime of another person such as:

  • Manage the principal’s assets
  • Pay the principal’s bills
  • Manage the person’s investments
  • Handle legal paperwork
  • Handle banking affairs
  • Transfer property

A power of attorney, on the other hand, is the legal document appointing the attorney in fact and granting this person the legal authority to act as the principal’s agent.

A power of attorney, whether general, limited or special, is typically valid during the life of a person and will terminate when the principal becomes incapacitated or dies.

However, a durable power of attorney will remain in effect even if the principal becomes incapacitated as this type of power of attorney is issued specifically for this purpose.

Attorney in fact FAQ

Attorney in fact FAQ

What does attorney in fact mean

You can define attorney in fact as a person designated by another one to act on his or her behalf in a general way, limited way or for a specific thing.

An attorney in fact designated by a general power of attorney is a person who has the broadest power to act on behalf of his or her principal and even make financial decisions for that person.

An attorney in fact designated under a limited power of attorney has broad powers in a specific area but does not have the ability to make financial decisions on behalf of his or her principal.

An attorney in fact designated by a special power of attorney is given the power to handle a very specific task or mandate such as attending the sale of a real estate property on the closing date.

How to select an attorney in fact

Choosing your agent is an important decision as you will entrust that person to make important decisions or take important actions on your behalf.

There is no set rule on how to select an attorney in fact but what’s important is that you fully trust the person and are confident that this person will act in your best interest.

You want to select someone who is:

  • Competent 
  • Trustworthy
  • Has integrity
  • Is organized
  • Has time to handle the mandate
  • Will take his or her role seriously 
  • Will act with prudence
  • Will not create legal issues for you

How should an attorney in fact sign a document

You should verify with a professional in your local jurisdiction to see how you must sign documents on behalf of a principal.

Typically, the following signature methods are accepted:

  • John Doe represented by Mary Smith as power of attorney 
  • John Doe represented by Mary Smith POA
  • Mary Smith POA for John Doe
  • Mary Smith attorney in fact for John Doe
  • Mary Smith attorney in fact for John Doe under POA dated _____
  • Mary Smith POA under POA dated _____

Is an attorney in fact an agent

Yes.

The attorney in fact acts as your agent.

An agent is a person who is legally designated to act on your behalf.

When you appoint a person to act on your behalf under a power of attorney, the person is called the “attorney in fact”.

When a person is designated by the court to act on someone’s behalf, that person can be called “guardian”, “conservator” or another designation.

What is an attorney in fact acknowledgment

An attorney in fact acknowledgment is when a person’s power of attorney is acknowledged before a notary public.

In the context of real estate transactions, a person’s power of attorney must be “acknowledged” before a notary public so it can be used for the closing of the transaction.

An attorney in fact acknowledgment will generally be required to sign a real estate deed, mortgage agreement, deed of trust or another real estate document.

If you enjoyed this article on ‘attorney in fact’, we recommend you read the following articles that you may equally enjoy:

LEAVE A REPLY

Please enter your comment!
Please enter your name here