A power of attorney is a legal document through which one person, called the principal, authorizes another person, called the agent or attorney-in-fact, to act on their behalf. The authority may cover financial transactions, property, contracts, healthcare decisions, legal claims, or other matters specified in the document.
A power of attorney may grant broad or limited authority and may become effective immediately or after a specified event. A durable power of attorney generally remains effective if the principal later becomes incapacitated. The agent’s authority depends on the document’s language and applicable state law.
Creating a power of attorney does not ordinarily transfer ownership of the principal’s property or automatically prevent the principal from making their own decisions. The agent must act within the authority granted and generally owes fiduciary duties to the principal. An attorney-in-fact does not have to be a licensed attorney.
