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Power of Attorney
A power of attorney consists of a written document that is signed by someone - known as the principal - authorizing a second person to act as an agent - in other words, to conduct business in the name of, and on behalf of the signer. The agent then becomes the attorney in fact for the principal.
This agent or attorney in fact has the authority to sign legal documents on the principal's behalf, including checks, titles and contracts. This agent will typically have access to bank accounts, and thus is held to an exceptionally high standard of ethics (see punctilio honorum). The agent does not sign documents with the principal's name, however; instead, the signature is the name of the agent and his/her junction, i.e., "John Smith, attorney in fact for Robert Doe.
A power of attorney may be general or special. A general power of attorney authorizes the agent to do virtually anything on behalf of the principal. A special power of attorney limits the agent's powers to certain issues, such as paying shares of a trust to beneficiaries, disposing of specified personal or real property, or entering into a specific contract. A literary agent is a good example of someone with special power of attorney; this person acts on behalf of an author only in the negotiation of contracts directly related to the publication of a book, performance of a stage play or production of a screenplay.
The general power of attorney is also known as a durable power of attorney, while the special power of attorney is technically known as nondurable.
In certain states such as New York, there is also what is called a springing power of attorney. This is an arrangement set up ahead of time, and is only activated by the occurrence of certain events - typically the incapacity of the principal. A living will and a Do Not Resuscitate Order are two examples in which springing power of attorney may be used.