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. Stock Power

    A legal power of attorney form that transfers the ownership of ...
  4. Audit

    1. An unbiased examination and evaluation of the financial statements ...
  5. Deed

    A legal document that grants the bearer a right or privilege, ...
  6. Loophole

    A technicality that allows a person or business to avoid the ...
RELATED FAQS
  1. 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 ... Read Full Answer >>
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. 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 ...
  7. 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.
  8. Mutual Funds & ETFs

    The Impact of the Janus Market Timing Ruling

    A look at the impact of the Janus Supreme Court ruling on market timing.
  9. Options & Futures

    Get To Know These Crucial US Options Market Regulations

    How are options regulated in the U.S and which organizations are involved in options market regulations?
  10. Economics

    The Impact Of Ending The US Embargo On Cuba

    Many argue that ending the US embargo on Cuba will not only make US consumers happy, but also help the US economy and bring more freedoms to Cuba.

You May Also Like

Hot Definitions
  1. Risk Averse

    A description of an investor who, when faced with two investments with a similar expected return (but different risks), will ...
  2. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  3. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  4. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  5. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  6. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
Trading Center