Definition of Limited Power of Attorney

By Tom Streissguth

A power of attorney allows an agent to act on behalf of a principal. When a principal signs and grants a power of attorney, he grants either general or limited authority to the agent. The limited (also known as "specific") power of attorney restricts the scope to the agent's activities.

A power of attorney allows an agent to act on behalf of a principal. When a principal signs and grants a power of attorney, he grants either general or limited authority to the agent. The limited (also known as "specific") power of attorney restricts the scope to the agent's activities.

Definition

A limited power of attorney specifies the authority the agent will have. The principal lists all the matters for which the agent will make decisions, sign documents or give instructions. Often, a limited power of attorney covers only a single process or matter; for example, a contract signing which the principal is unable to carry out due to absence or illness.

Ready to appoint a power of attorney? Get Started Now

Scope

The principal may also limit a power of attorney to a single field of activity, such as the handling of investments. A principal who trusts an agent to make decisions and sign paperwork related to an account may grant a limited power of attorney to an investment adviser.

Timeframe

A principal may also limit a power of attorney to a specific period of time. This often occurs when a principal is temporarily absent from his home or business and trusts an aide or friend to carry out business decisions and sign paperwork on his behalf.

Document

The principal must sign, date and have witnessed the limited power of attorney, which must set out in detail the scope of the agent's authority. This includes specific information on the accounts, negotiations or other mechanisms by which the agent may operate. Most limited powers of attorney also contain a revocation clause, which the principal may sign and date at any time in order to void the document and bring the agent's authorities to an end.

Ready to appoint a power of attorney? Get Started Now
Power of Attorney Letter Format

References

Related articles

How to Transfer a Title With a Power of Attorney

How to Create a Temporary Power of Attorney

Full Power of Attorney Definition

Related articles

Definitions of Durable and Non-Durable Power of Attorney

When Does a Power of Attorney Expire?

Selling Property & Limited Power of Attorney

Abuse of a Power of Attorney for an Incapacitated Family Member

Browse by category