What is a power of attorney
A power of attorney (POA) is a legal written agreement that enables a person to transfer their authority to another person/persons thus making them the Attorney in Fact. The person that passes on their authority are often referred to as the principal or granter and the person that receives the authorization are called the agent or attorney-in-fact.
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Power of attorney explained
Power of attorney is a tool that is often used by agents to obtain authorization to act on the behalf of the granter. This allows the attorney-in-fact to execute power in terms of handling tax auditing as well as stock power for the granter.
A power of attorney document is written with the specifications in line with the granter’s wishes. This includes detailing the exact powers that the attorney will be granted and what the purpose of the transfer of power is. In addition, the power of attorney agreement is made to be time specific, that is, it specifies the time period that the transfer of authority is valid for. The time period can either have an expiry date or be in perpetuity.
Power of attorney agreements are most widely used in the case that the granter is physically or mentally unable to make decisions. This can be a result of an illness, accident or even an unscheduled absence (for example, leaving the country while important decisions need to be made). Thus the POA document provides the attorney-in-fact to act on the behalf of the granter, taking full responsibility for the business outlined in the agreement.
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