Power Of Attorney
What Does Power Of Attorney Mean?
A power of attorney is a legal document that authorizes an individual, known as the agent or attorney-in-fact, to act on behalf of another person, referred to as the principal. This authorization can grant either broad or limited legal authority to manage the principal’s affairs. People typically grant power of attorney in situations where they may become seriously ill, disabled, or unable to sign legal documents themselves.
In the context of insurance, an insurer may require power of attorney from the insured to facilitate necessary transactions in the event of a loss.
Insuranceopedia Explains Power Of Attorney
A power of attorney specifies the exact transactions an agent is authorized to conduct on behalf of the principal. It can be as limited or broad as desired and may take effect immediately or upon a specified event. Individuals often grant power of attorney for various reasons, such as managing financial or business matters, signing legal documents when they cannot be present, or preparing for situations where they might become seriously ill, disabled, or mentally incapacitated.
When activated in such circumstances, the agent can make medical decisions for the principal, manage their assets, or both. Because this document grants significant legal authority over the principal’s affairs, it is crucial to appoint a trusted family member, friend, or ethical professional.
