A full power of attorney is a document in which a principal gives a person he appoints as his agent the power to handle his affairs. The agent, who may be anyone the principal chooses, is granted the power to act on the principal’s behalf in a range of circumstances. With this document, the principal's agent has full authority to make financial and medical decisions for the principal. This usually includes decisions concerning the control and transfer of money and assets.
Usually, a person carefully considers his options before he chooses to grant a full power of attorney. This is due to the fact that it gives the agent the authority to make decisions regarding all situations that affect the principal. For example, he may make decisions regarding medical treatments, handle the principal's investments, and even gain access to his safe deposit boxes. The agent may enter into contracts on behalf of the principal or terminate those that are already in effect. He may even file the principal’s tax returns and make decisions for him regarding benefits provided by the government.
In most cases, a full power of attorney takes effect as soon as it is executed. This is not always the case, however, and in some cases, a person may create a power of attorney that only takes effect when the principal is unable to handle his own affairs. This type of power of attorney, called a springing power of attorney, may take effect when a person becomes ill or has surgery and will be incapacitated for a time.
A power of attorney may remain in place indefinitely, or it may be revoked by the principal at any time. For example, the principal may revoke it if he feels the agent is doing a poor job of acting on his behalf or if he no longer needs the agent’s help. One may also end if the principal is declared incompetent. Additionally, powers of attorney always end when the principal dies. Some powers of attorney end when the principal is incapacitated, although it is possible to create one that stays in effect in such a case. This type of document is referred to as a durable power of attorney.
Often, people would rather not grant another party full power to act on their behalf, so they may create limited powers of attorney instead. In such a case, a person may give his agent the right to make decisions and take action in some areas of his life but not others. For example, a person may create a limited power of attorney that gives the agent the right to make investment decisions for a particular account rather than an allowing him access to all of his accounts.