Power Of Attorney

AAA

DEFINITION of 'Power Of Attorney'

A legal document giving one person (called an "agent" or "attorney-in-fact") the power to act for another person (the principal). The agent can have broad legal authority or limited authority to make legal decisions about the principal's property and finance. The power of attorney is frequently used in the event of a principal's illness or disability, or when the principal can't be present to sign necessary legal documents for financial transactions.

INVESTOPEDIA EXPLAINS 'Power Of Attorney'

There are many good reasons to make a power of attorney, as it ensures that someone will look after your financial affairs if you become incapacitated. You should choose a trusted family member, a proven friend or a reputable and honest professional. Remember, however, that signing a power of attorney that grants broad authority to an agent is very much like signing a blank check - so make sure you choose wisely and understand the laws that apply to the document.

RELATED TERMS
  1. Attorney's Fee Awards

    The order of payment of the attorney fees from one party to another ...
  2. Income Tax

    A tax that governments impose on financial income generated by ...
  3. Audit

    1. An unbiased examination and evaluation of the financial statements ...
  4. Accountant

    A professional person who performs accounting functions such ...
  5. Loophole

    A technicality that allows a person or business to avoid the ...
  6. Deed

    A legal document that grants the bearer a right or privilege, ...
Related Articles
  1. Personal Finance

    How To Pick The Right Lawyer

    Find out what factors to consider before hiring an attorney.
  2. Retirement

    Talking To Aging Parents About Money

    Addressing this difficult topic is crucial, but you must approach it with compassion.
  3. Retirement

    6 Estate Planning Must-Haves

    You need an estate plan even if you don't have significant assets. Learn what you need to include in yours.
  4. Options & Futures

    Getting Started On Your Estate Plan

    With some preparation, you can save your heirs from paying a hefty estate tax. Here are some tips.
  5. Options & Futures

    Three Documents You Shouldn't Do Without

    Estate planning is not just about the division of assets after you die. Read on to save your loved ones extra grief.
  6. Retirement

    What documents should I have ready in case my partner or I should die?

    Estate planning is one of those topics that most people avoid dealing with until they're forced to. Because of this, many people find themselves in a bind when a loved one passes away. By having ...
  7. Options & Futures

    10 Last-Minute Retirement Tips

    The months leading up to your retirement can be the most crucial in terms of planning. Review your insurance, make a budget and plan your estate so the transition to retirement is as easy as ...
  8. Options & Futures

    Your Will: Why You Need A Power Of Attorney And Beneficiaries

    What would happen if you were suddenly unable to manage your financial affairs? Preparation is the best protection.
  9. Economics

    The Economic Impact of Better US-Cuba Relations

    We examine what the normalization of relations between the US and Cuba will mean for the two countries' economies.
  10. Savings

    I’m twice divorced –-can I still collect spousal benefits?

    Unsure if you’re eligible for spousal benefits if you’re divorced –more than once? Rob Kron from Blackrock gives a simple answer.

You May Also Like

Hot Definitions
  1. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  2. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  3. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  4. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  5. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  6. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
Trading Center