ShareThisBy ALAN S. NOVICK
Thursday, November 16, 2006
A durable power of attorney is a vital element of any complete estate plan.
It is important for the principal, the person who is named the attorney _ sometimes called the attorney-in-fact _ to designate someone he can rely upon to have the power to act for him and to sign his name to almost any legal document. But what are the responsibilities and liabilities of the attorney-in-fact?
An attorney-in-fact in legal jargon is called a fiduciary , and is a person, or institution, who must observe the standards of care applied to trustees. The attorney-in-fact is given broad powers designed to give him the power to act in the best interests of the principal in all situations in which the principal could act himself. Essentially, he is given the power, under the written document, to do anything that the principal himself could do. The document will sometimes be more restrictive, and is then called a limited power of attorney.
The attorney-in-fact is not liable to third parties for anything he does carrying out the durable power of attorney if the act was authorized in the document. If the exercise of the power is improper, the attorney-in-fact is liable to those who may be harmed by his actions for damage or loss resulting from a breach of his fiduciary duty to the same extent as the trustee of a trust.
A durable power of attorney form will often have a line for the signature of the named attorney-in-fact to accept the appointment. In Florida an attorney-in-fact should not sign the acceptance until and unless it is absolutely necessary to act, and then only sign for purposes of the proposed action. This caution may not be necessary under other state laws, and in fact other states may make it advisable to have the attorney-in-fact sign the original document in order to have a record of his signature.
The durable power of attorney may be exercisable as of the date of execution, or may be conditioned on the written designation that the principal is incapacitated or incoherent.
In either case good planning requires considering the provisions described above and a thorough understanding by both parties, the principal and the attorney in fact, of what their rights, duties and obligations are.
