Signing As An Attorney-In-Fact: Proper Procedures And Guidance

Quick answer

• Understand the scope of your powers granted in the Power of Attorney (POA) document.
• Always sign clearly as the attorney-in-fact, not as yourself personally.
• Use the principal’s name followed by “by [Your Name], Attorney-in-Fact.”
• Keep meticulous records of all transactions made on behalf of the principal.
• Avoid commingling your personal funds with the principal’s funds.
• Consult with legal counsel if you have any doubts about your authority or responsibilities.

Who this is for

• Individuals appointed as an attorney-in-fact in a Power of Attorney document.
• People who need to manage the financial or legal affairs of another person.
• Those who want to ensure they are acting legally and responsibly in their fiduciary role.

What to check first (before you act)

Your Authority and Scope

Before you sign anything, thoroughly review the Power of Attorney document itself. It will specify the exact powers granted to you by the principal. Some POAs are very broad, while others are limited to specific actions or assets.

The Principal’s Capacity

Ensure the principal had the legal capacity to sign the POA document when it was created. If there are questions about their mental capacity at that time, it could invalidate the document.

Your Responsibilities

Understand that acting as an attorney-in-fact is a fiduciary duty. This means you must act in the principal’s best interest, with honesty, loyalty, and good faith. Mismanaging funds or acting against the principal’s wishes can have serious legal consequences.

Your Own Financial Situation

Be aware of your own financial standing and any potential conflicts of interest. You must not use the principal’s assets for your own benefit, except as explicitly permitted by the POA or state law for reasonable compensation.

The Specific Transaction

For each transaction, confirm that it falls within the scope of your powers as defined in the POA. If you are unsure, it’s always best to seek clarification from a legal professional.

Step-by-step (simple workflow)

1. Obtain the Original Power of Attorney Document

What to do: Secure the original, signed, and notarized Power of Attorney document. This is your legal authority.
What “good” looks like: You have the physical document readily available and can present it when required.
Common mistake and how to avoid it: Relying on a copy. Always use the original document when requested by financial institutions or other parties.

2. Understand the Principal’s Intentions and Wishes

What to do: Review any notes, preferences, or instructions the principal may have left regarding their affairs.
What “good” looks like: You have a clear understanding of how the principal would want their finances managed.
Common mistake and how to avoid it: Assuming you know best. Always prioritize the principal’s known wishes, even if they differ from your own preferences.

3. Identify the Transaction Requiring Your Signature

What to do: Determine the specific action you need to take, such as signing a check, a contract, or a real estate document.
What “good” looks like: You know exactly what document needs your signature and why.
Common mistake and how to avoid it: Signing without understanding the purpose of the document. Always read and comprehend what you are signing.

4. Prepare Your Signature Block

What to do: Create a signature block that clearly indicates you are signing in your capacity as attorney-in-fact.
What “good” looks like: Your signature block is consistent and easily identifiable.
Common mistake and how to avoid it: Signing only your name. This makes it appear as if you are acting for yourself, not the principal.

5. Sign the Document

What to do: Write the principal’s name, followed by “by” and then your name and title as attorney-in-fact. For example: “John Doe by Jane Smith, Attorney-in-Fact.”
What “good” looks like: The signature clearly shows you are acting on behalf of the principal.
Common mistake and how to avoid it: Signing “John Doe, Attorney-in-Fact” without the “by.” This can be ambiguous.

6. Include the Date of Signing

What to do: Always date your signature.
What “good” looks like: The date is clear and accurate.
Common mistake and how to avoid it: Forgetting to date the signature, which can create ambiguity about when the action was taken.

7. Keep Copies of All Signed Documents

What to do: Make and retain copies of every document you sign.
What “good” looks like: You have a complete paper trail of all your actions.
Common mistake and how to avoid it: Not keeping records. This is crucial for accountability and to protect yourself from potential disputes.

8. Maintain Detailed Records of All Transactions

What to do: Keep a ledger or spreadsheet of all income received, expenses paid, and any other financial activities undertaken.
What “good” looks like: You can easily account for every dollar managed on behalf of the principal.
Common mistake and how to avoid it: Mixing personal and principal funds. This is a major red flag and can lead to accusations of misappropriation.

9. Communicate with Relevant Parties (When Appropriate)

What to do: Inform relevant parties (e.g., family members, financial advisors) of significant actions taken, as long as it aligns with the principal’s wishes and doesn’t violate privacy.
What “good” looks like: Transparent communication fosters trust and avoids misunderstandings.
Common mistake and how to avoid it: Acting in secrecy. While you have authority, transparency can prevent future conflicts.

10. Seek Professional Advice When Necessary

What to do: Consult with an attorney or financial advisor if you encounter complex situations or are unsure about your responsibilities.
What “good” looks like: You proactively address potential issues with expert guidance.
Common mistake and how to avoid it: Guessing your way through complex legal or financial matters. This can lead to costly errors.

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Signing only your own name	Personal liability for the transaction; transaction may be deemed invalid	Use the “Principal’s Name by Your Name, Attorney-in-Fact” format.
Failing to present the original POA	Inability to conduct transactions; suspicion of fraud	Always have the original document ready.
Commingling funds	Accusations of theft or misuse of funds; legal disputes	Maintain separate bank accounts for the principal.
Exceeding granted powers	Invalid transactions; potential legal action against you	Strictly adhere to the powers listed in the POA.
Not keeping records	Inability to account for actions; difficulty settling accounts	Maintain meticulous, detailed financial records.
Acting in self-interest	Breach of fiduciary duty; lawsuits from beneficiaries or principal	Always prioritize the principal’s best interests.
Failing to update POA if needed	POA may become invalid if principal’s wishes change or circumstances shift	Periodically review the POA’s continued relevance with the principal (if possible) or legal counsel.
Not understanding state laws	Non-compliance with local regulations; invalid actions	Research or consult an attorney about your state’s POA laws.
Ignoring the principal’s wishes	Breach of trust; potential legal challenges	Document and follow the principal’s expressed desires.
Delaying necessary actions	Financial harm to the principal; missed opportunities	Act promptly and efficiently within your granted authority.

Decision rules (simple if/then)

• If the Power of Attorney document is not the original, then you likely cannot act on it because financial institutions and legal entities typically require the original for verification.
• If the transaction you need to make is not explicitly listed or implied within the powers granted by the POA, then you should not proceed without seeking clarification from an attorney because you may be exceeding your authority.
• If you are unsure whether a specific action is in the principal’s best interest, then you should consult with a trusted advisor or legal counsel because your fiduciary duty requires you to act solely for the principal’s benefit.
• If a financial institution asks for additional identification or clarification beyond the POA, then you must provide it because they are verifying your identity and authority.
• If the principal is still alive and capable of making decisions, and they express a different wish than what the POA might suggest, then you should try to follow the principal’s current wishes, if legally permissible and documented, because their current intent takes precedence.
• If you are asked to sign a document that benefits you personally in a way not authorized by the POA, then you should refuse to sign because this would be a conflict of interest and a breach of your fiduciary duty.
• If the principal passes away, then your authority as attorney-in-fact generally ceases immediately, and the executor of the will or administrator of the estate takes over because the POA is no longer valid.
• If you discover assets or debts that were not disclosed when the POA was created, then you must account for them and manage them according to your fiduciary duties, possibly seeking legal advice for complex situations.
• If you are required to file taxes or financial reports on behalf of the principal, then you must do so accurately and on time to avoid penalties and legal issues.
• If you have any doubts about the validity of the POA document itself, then you should consult with an attorney before taking any action because a flawed POA can lead to significant legal problems.

FAQ

How do I sign a check as an attorney-in-fact?

You should endorse the check by writing “Pay to the Order of [Principal’s Name]” and then signing your name as “[Your Name], Attorney-in-Fact for [Principal’s Name].” Alternatively, some institutions accept “[Principal’s Name] by [Your Name], Attorney-in-Fact.”

Can I use my own bank account to deposit funds from the principal?

No, you must never commingle the principal’s funds with your own. All transactions should be handled through accounts opened in the principal’s name or specifically designated for the principal’s affairs.

What if the Power of Attorney document is old?

If the document is old, verify that it is still valid under your state’s laws and that it grants the powers necessary for current transactions. Some older POAs might not meet current legal standards.

What happens if I make a mistake when signing?

If you make a mistake, the transaction might be invalid, or you could be held personally liable. It’s best to correct the signature if possible (e.g., by crossing out and initialing, with permission) or to obtain a new document if the mistake is significant.

Do I need to show the POA every time I sign?

You will need to present the original POA to financial institutions, government agencies, or when conducting significant transactions. For smaller, routine matters, they may not always require it, but it’s wise to have it available.

Can I sign electronically as an attorney-in-fact?

Electronic signatures are increasingly accepted, but you must follow the specific procedures for e-signatures and ensure the platform is secure and legally compliant. The signing format should still clearly indicate your role as attorney-in-fact.

What if the principal is deceased?

If the principal has passed away, your authority as attorney-in-fact typically ends immediately. You cannot act using the POA after their death; the executor of the estate then has authority.

How do I handle a Durable Power of Attorney?

A durable POA remains effective even if the principal becomes incapacitated. Your signing procedures are the same as with a non-durable POA, but you have the authority to act even if the principal can no longer make decisions themselves.

What this page does NOT cover (and where to go next)

• Specific legal requirements or interpretations of Power of Attorney laws in your state. (Next: Consult with an attorney specializing in estate planning or elder law in your jurisdiction.)
• Complex tax implications of managing another person’s finances. (Next: Seek advice from a qualified tax professional or CPA.)
• Investment strategies or advice for the principal’s assets. (Next: Consult with a licensed financial advisor or investment manager.)
• Procedures for challenging or revoking a Power of Attorney. (Next: Consult with an attorney for guidance on legal challenges.)
• Detailed accounting and reporting standards beyond basic record-keeping. (Next: Review resources on fiduciary accounting or consult with an accountant.)