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.

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.

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.

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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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Iowa Power of Attorney Rules
 

References

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Definitions of Durable and Non-Durable Power of Attorney

A power of attorney, or POA, grants an individual (“agent”) the legal authority to make decisions on behalf of another individual (“principal”). The decision can involve legal, financial or health matters. The power of attorney may be limited in scope; it may also be more general, allowing the agent a wide range of legal powers. A durable power of attorney refers to the agent’s authority when the principal is incapacitated.

What Is a Revocable Power of Attorney Form?

A revocable power of attorney, or POA, is a legal document that appoints an agent, or attorney-in-fact, to handle transactions on your behalf. The agent can be any trustworthy person or institution you choose. Most states require POA documents to be in writing and specify certain requirements for creating and revoking POAs. Be sure your power of attorney form and any revocation you issue conforms with your state law requirements.

How to Set Up Enduring Power of Attorney

If you are worried about what will happen to your assets and affairs should you become incapacitated, setting up an enduring power of attorney may ease your fears. An enduring power of attorney – referred to as a “durable” power of attorney in the United States – is a document granting another individual the right to handle certain financial or medical decisions on your behalf. A durable power of attorney differs from a standard power of attorney in that your representation, known as your “agent” or "attorney-in-fact" does not lose his right to manage your affairs should you become mentally incompetent. While an attorney can provide you with helpful information when completing this process, an attorney is not necessary to set up and execute a durable power of attorney. You can complete the documentation on your own, or use an online document preparation website.

Power of Attorney

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