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.

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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.

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References

Related articles

Durable Power of Attorney in Massachusetts

A durable power of attorney, or POA, allows an agent to act on behalf of a principal — the person granting the power — even after the principal suffers an incapacitating illness. Massachusetts, like other states, allows individuals of sound mind to create a durable power of attorney, which can help safeguard the interests of the principal, his family and heirs.

What Protects Families From Power of Attorney Abuse?

A power of attorney is a legal status that grants an individual powers to make financial or health decisions on behalf of another person. The person granting the power of attorney is the principal and the individual receiving the powers is the agent. Agents are required to act in the best interests of the principal; however, it is not uncommon for agents to take advantage of the situation by stealing money or unlawfully selling property. It may be possible to safeguard against this situation by using specific language in the power of attorney document or by appointing more than one power of attorney. If the damage has already been done, there are civil and criminal sanctions available.

How Long is a Power of Attorney Valid?

Not all powers of attorney are created equal. Many are created as general, durable powers of attorney that are intended to last the lifetime of the principal, or person granting the power of attorney. Others are made out of necessity when the principal can’t be in two places at the same time: In this case his attorney-in-fact, or agent appointed by the power of attorney, must act for him. These powers of attorney are often intended to be temporary in nature. Other factors or actions also determine how long the granted powers last.

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