Final answer:
A person who can sign legal papers for another holds a Power of Attorney, and is known as an attorney-in-fact. Power of Attorney grants varying levels of authority to the attorney-in-fact to make decisions for the principal, possibly even if the principal becomes incapacitated.
Step-by-step explanation:
If a person can sign legal papers for another person, they typically hold what is known as Power of Attorney (POA). The individual who is given the POA is referred to as an attorney-in-fact or agent. This legal document grants the attorney-in-fact the authority to act on behalf of the principal in specified or all legal or financial matters, if the principal is unable to do so themselves due to various reasons such as absence, illness, or incapacity.
The person giving the authority is the principal, and they can determine the extent of power given to the attorney-in-fact. The POA can be durable, meaning it remains in effect even if the principal becomes incapacitated, or non-durable, meaning it is only effective when the principal is capable of making decisions. It's important to note that an attorney-at-law or lawyer is different from an attorney-in-fact; an attorney-at-law is a licensed professional who can represent clients in legal matters.
An ostensible agency refers to a situation where a person appears to be the agent of another but has not been granted the authority to act on their behalf, which is not the same as having a POA. Therefore, the correct answer to the question of what a person has who can sign legal papers for another person is B, Power of attorney.