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The Power of Protection.
This page examines common definitions and their shortcomings and includes a better definition of what is a Power of Attorney.
This page discusses the importance of detail in a Power of Attorney and their common features, as well as the worrying trend of using government forms.
The contents of this page are focused upon Powers of Attorney for commercial purposes.
A Power of Attorney is:
"..an instrument in writing by which one person as principal, appoints another as his agent and confers upon him authority to perform certain specified acts or kinds of acts on behalf of the principal.."[1]
"..a formal instrument by which one person empowers another person to represent him, or act in his stead for certain purposes.."[2]
The common definitions above fail to recognise that:-
These shortcomings highlight the inadequacy of common definitions.
A Power of Attorney is a convenient legal instrument able to be used by any kind of legal entity to establish a scheme to assign tasks, variously or otherwise, to a chosen agent or chosen agents.
Through the terms of their Power of Attorney, the principal can prescribe how the scheme is to work, dealing with issues like:-
The proposed agent or agents are at liberty to elect whether or not to accept appointment as an agent, upon the terms set out in the Power of Attorney.
If the proposed agent or agents decide to accept appointment, upon accepting appointment they are bound by a fiduciary duty owed to the principal, which requires them to put the interests of the principal first at all times, being a central feature of a Power of Attorney.
Omitting necessary detail from a Power of Attorney comes at the peril of the principal.
For example, the absence of suitable words in a Power of Attorney dealing with the following kinds of issues would present difficulties:-
The right words in a Power of Attorney can solve all of these problems.
A Power of Attorney identifies an agent or various agents and the tasks they may perform and may also include terms that:-
Surprisingly, none of these arrangements are included in government forms.
Without access to these kinds of features, creating a complete and personal solution using a Power of Attorney is not possible.
A Power of Attorney may be commercial, non-statutory non-durable, non-statutory durable, non-statutory, non-durable, durable, statutory, military, legislative, contractual, oral, irrevocable, general, limited, special, specific, springing, temporary or ordinary, entirely depending upon its terms.
The prolific use of very short Powers of Attorney in the shape of government forms is a worrying trend.
It is benign to suggest that government forms do an effective job of ensuring that disputes involving a Power of Attorney do not reach Court. Most likely, the lack of detail in government forms has the opposite effect.
Government forms are inflexible and generic.
In Florida and Pennsylvania, there is no government form, although the use of varieties of Powers of Attorney that resemble a government form is likely.
The problems associated with using government forms prevail in both durable and other settings.
Without using a better Power of Attorney, a user cannot impose a genuinely unique and effective management scheme, tailored to their specific needs and circumstances.
Without more detail than appears in a government form, almost everything about the scheme a Power of Attorney imposes is open to debate, leaving the user to throw themselves upon a Court, if questions arise.
Absent detail in any Power of Attorney can easily result in a Power of Attorney being less than fit for purpose.
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See for example Bank of America v Horowytz (1968) 248 A 2d 446 at 448 (Bergen County Ct, New Jersey); King v Bankerd (1985) 492 A 2d 608 at 611 (CA, Maryland); Sevigny v New South Federal Savings and Loan Association (1991) 586 So 2d 884 at 886 (SC, Alabama); Kisselbach v County of Camden (1994) 876 P 2d 1383 at 1386 (App Div (Superior Ct), New Jersey); Willey v Mayer (1994) 876 P 2d 1260 at 1264 (SC, Colorado); Matter of Trust of Franzen (1998) 955 P 2d 1018 at 1021 (SC, Colorado); Comerica Bank-Texas v Texas Commercial Bank National Association (1999) 2 SW 2d 723 at 725 (CA, Texas). ↩︎
E Jowitt & C Walsh, Jowitt's Dictionary of English Law, 2nd ed, by J Burke, Sweet & Maxwell, London, 1977, vol 2, p 1399. ↩︎