What’s a Power of Attorney?
The right to take legal action on another person’s behalf is conferred using Power of Attorney. In terms of studying abroad, it is especially useful when it comes to things like financial aid disbursement or dealing with the student’s financial institution while he or she is out of the country.
A Power of Attorney is a legal instrument that is used to delegate legal authority to another. The person who signs (executes) a Power of Attorney is called the Principal. The Power of Attorney gives legal authority to another person (called the Agent or Attorney-in-Fact) to make property, financial, and other legal decisions for the Principal.
Are there different types of Power of Attorney?
Yes. There are “Nondurable,” “Durable,” and “Springing” Power of Attorney.
A “Nondurable” Power of Attorney is used for a specific transaction, like the closing on the sale of property, or the handling of financial affairs while the Principal is traveling outside of the country.
A “Durable” Power of Attorney enables the Agent to act for the Principal even after the Principal is not mentally competent or physically able to make decisions. The “Durable” Power of Attorney may be used immediately, and is effective until it is revoked by the Principal, or until the Principal’s death.
A “Springing” Power of Attorney becomes effective at a future time. That is, it depends on the happenings of a specific event chosen by the Principal (for example, an illness or disability). A “Springing” Power of Attorney remains in effect until the Principal’s death, or until revoked by a court.
How do I select an Agent for Power of Attorney?
You should choose a trusted family member, a proven friend, or a professional with an outstanding reputation for honesty. Remember, signing a Power of Attorney that grants broad authority to an Agent is very much like signing a blank check. Most students who study abroad designate one or both of their parents as Agents. However, know that if you appoint two or more Agents, you must decide whether they must act together in making decisions involving your affairs, or whether each can act separately.
Once I sign Power of Attorney, may I make legal and financial decisions for myself?
Yes. The Agent named in a Power of Attorney is your representative, not your boss. As long as you have the legal capacity to make decisions, you can direct your Agent to do only those things that you want done.
How many copies of a Power of Attorney should I sign?
You are required to sign (execute) only one copy. However, it is not unusual for a Principal to sign several original copies. Banks and financial institutions, for example, usually require an original or a certified copy of a Power of Attorney before allowing an Agent to transact business on the Principal’s behalf. And banks frequently provide customers with their own Power of Attorney forms.
Do I need to have my signature witnessed on a Power of Attorney?
Yes. Your signature on the Power of Attorney must be witnessed by a Notary Public (that is, it must be notarized). Most banks and financial institutions employ notaries. When having something notarized, remember to always show a form of photo identification (your Agent should bring one, too).
Do I need a lawyer to prepare a Power of Attorney?
No. You are not required to hire a lawyer to draft a Power of Attorney. However, because a Power of Attorney is such an important legal instrument, the careful consumer may want to consult a lawyer.