Perhaps one of the most confusing estate planning terms to those who do not have a legal background is “attorneys-in-fact.” An attorney in fact is a person or organization that plays a key role in almost every estate plan. Understanding what attorneys-in-fact do, how they do it, and how you can use them in your estate plan is essential regardless of what your final estate plan ends up looking like. Today we are going to take a closer look at attorneys-in-fact so we can clear up any potential confusion surrounding that term.
What are Attorneys-in-fact?
Attorneys-in-fact are people, and occasionally organizations, that have the legal authority to act on, and make decisions for, another person or organization. When someone appoints an attorney in fact, that person, known as a principal, chooses someone to make decisions on his or her behalf. Attorneys-in-fact, also known as agents, have the ability to make legally binding decisions on the principal’s behalf as if the principal was making those decisions on his or her own.
Attorneys-in-fact can make a wide range of decisions, including choices about finances, health care, and even parenting or childcare.
Do I Have to Hire a Lawyer to Get an Attorney-in-Fact?
Attorneys-in-fact have almost nothing to do with lawyers or attorneys at law. An attorney at law, commonly referred to as a lawyer, is a person who is licensed by the state of Florida to practice law and dispense legal advice. On the other hand, attorneys-in-fact can be any capable adult, or organization, appointed by someone else to act as an agent.
Attorneys-in-fact do not have to have any legal background or knowledge, nor do they gain the ability to practice law once appointed. However, because attorneys-in-fact are appointed through legal documents called powers of attorney, and those legal documents have to meet specific state standards, it’s always in your best interests to contact a lawyer if you want to appoint an attorney-in-fact or create a power of attorney.
What is a Power of Attorney?
A power of attorney is a document. The person making the document, the principal, appoints an attorney-in-fact and declares what that agent’s authority is when making decisions on behalf of the principal. Powers of attorney can only be created by mentally sound adults, but can otherwise be made to suit the needs of the principal creating them. Powers of attorney are powerful, flexible, and useful estate planning tools that almost everyone includes when they create an estate plan.