What is a General Power of Attorney?

N. Madison

A general power of attorney is a document that gives a person the legal right and power to handle another person’s affairs. This power is usually granted when the person who creates the power of attorney, often called the principal, is unable to handle his own affairs or unavailable to do so. For example, a general power of attorney may be helpful when a person must leave the country in which he resides for a significant amount of time or becomes ill with a condition that would prevent him from handling his own affairs. The person who is given this power is called an agent or attorney-in-fact and has the same powers the principal would normally have.

Businessman with a briefcase
Businessman with a briefcase

Typically, granting a general power of attorney is not a decision made lightly; there are no restrictions on what the agent or attorney-in-fact can do once it is signed. This person can make decisions regarding how the principal’s money is spent and how his assets are managed. If the principal owns a business, the agent or attorney-in-fact can even take over control of it. If the agent chosen is untrustworthy or irresponsible, he may spend the principal’s money on himself rather than on behalf of the principal. He could even sell the principal’s assets when it is not in the principal’s best interest to do so.

When a general power of attorney is granted, the agent or attorney-in-fact may also make decisions regarding life insurance and government benefits. For example, the agent or attorney-in-fact can purchase life insurance for the principal and may even make changes to existing policies. He may also act on the principal’s behalf when it comes to applying for government benefits. This person may even manage the principal's pension and other sources of retirement income.

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Though a person who is granted power over another party’s affairs is sometimes referred to as an attorney-in-fact, he need not be an attorney or have any legal experience. Usually, a person who signs this type of power of attorney turns this power over to a relative he trusts. For example, he may name a spouse, adult son or daughter, or even a sibling as his agent. A person may choose a close friend as well.

Signing a general power of attorney doesn’t necessarily take away the principal’s ability to make any decisions for himself. If the principal is mentally capable, he can still make decisions as desired. He may, in such a case, simply share the power to make decisions with his agent. Additionally, the principal can usually revoke a general power of attorney if he feels his agent is doing a poor job.

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