What Is the Difference Between General Power of Attorney and Limited Power of Attorney?

By Jeffry Olson, J.D.

What Is the Difference Between General Power of Attorney and Limited Power of Attorney?

By Jeffry Olson, J.D.

When one person, known as the principal, grants power of attorney (POA) to another person, known as the agent or attorney-in-fact, it allows the agent to act when the principal cannot act on their own behalf. The power granted to the agent varies widely. It can apply to one particular transaction, such as a real estate closing, or it can apply broadly, to all of the principal's finances. The timeframe the powers apply to also varies. The power and length of time depend on the language and type of POA executed.

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Limited vs. General Power of Attorney

A limited POA gives the agent power to act on behalf of the principal for a limited purpose. It may allow the agent to act on the principal's behalf for a single real estate transaction, or it may allow the agent to act on behalf of the principal for the sale of a motor vehicle, among other purposes. The language of the document granting the authority restricts both the power of the agent and the length it lasts.

A general power of attorney is much broader, granting the agent all powers and authority the principal has. For example, it allows the agent to conduct any and all financial transactions on behalf of the principal. This ranges from paying the bills of the principal to signing documents on their behalf or engaging in real estate transactions. A principal gives an agent general power when they need assistance with financial matters, for whatever reason. The authority will end when the principal becomes incapacitated, dies, or rescinds it.

Durable vs. Springing Power of Attorney

A durable POA remains in effect after the principal becomes incapacitated. This can apply to either limited or general authority. A nondurable one ends when the principal becomes incapacitated. Choosing durable authority for an agent allows them to act on behalf of the principal even after the principal becomes incapacitated. Durable powers remain in effect until the principal dies or rescinds it.

A springing power of attorney becomes effective at a certain date or upon a specific event. A common example is the incapacitation of the principal. In that case, the power is only effective when the principal becomes incapacitated, and not before. With this type of authority, it is important that the language describing the standard for determining the springing event, such as incapacity, is clear in the document.

The power and duration depend on the language of the document. Limited powers are given for a specific event or purpose. The general power of attorney is much broader, often including all financial transactions. Unless it is durable, it ends when the principal becomes incapacitated. A springing POA only takes effect upon a specified event, such as the incapacitation of the principal. Regardless, it will always ends upon the death of the principal.

If you are interested taking next steps, consider whether you want someone to have limited or general power, and what type of decisions they can make. You'll also want to determine whether you want durable or springing POA language implemented. The more informed you are regarding power of attorney rules, the better protected you or a loved one will be.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.