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

By Marie Murdock

A power of attorney authorizes another person, referred to as your attorney-in-fact, to act for you, the principal, when you are unable, unwilling or incapable of acting on your own. The power can apply to a particular transaction or under a widespread host of circumstances. The type of power of attorney you execute will govern the types of transactions covered by it and often the time period during which it may be used.

Powers

A limited power of attorney contains language that authorizes one or a few acts, often related to a specific event. For instance, if you are out of town frequently and have a vehicle for sale, you may appoint a trusted friend or family member as your attorney-in-fact to execute the bill of sale and vehicle title. A general power of attorney, on the other hand, covers a wide spectrum of acts that an attorney-in-fact may perform on a principal’s behalf and is often practically unlimited in nature.

Specificity

A general power of attorney may make a broad statement regarding real estate transactions, whereas a limited one will be more specific. A general power of attorney may allow your attorney-in-fact to deal with any or all of your real property by selling, leasing or mortgaging it on your behalf. A limited specific power of attorney, however, must describe the action to be performed -- such as signing a mortgage or deed -- and must describe the particular parcel of real estate involved, usually with the legal description.

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Expiration

A limited power of attorney may also establish an expiration date after which time your attorney-in-fact may no longer act for you. The powers granted may be few or many, limited only by the date stated in the document.

Activation Event

In some states, a general power of attorney may also establish a date when it becomes effective. You, as principal, may wish for your power of attorney to become effective upon some future event, such as your mental incapacity. These types of powers of attorney are often referred to as springing powers of attorney and are considered general, even though limited by their effective date. Some states have adopted a uniform power of attorney act which may invalidate most springing powers of attorney.

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References

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