A Limited power of attorney is also called a Special or Temporary power of attorney. It gives a third party the authority to act in a limited capacity to perform specific transactions, perhaps to sell property for the owner. This is most often used when the principal is unable to complete the transaction for reasons that do not need to be mentioned in the document. The agent or attorney-in-fact has no other authority to act on behalf of the principal other than what is assigned to them in the limited power of attorney.
Limited power of attorney allows for someone else to make specific decisions on your behalf but is limited by restrictions set in place by you, the grantor. Limited power of attorney agreements are typically used while the grantor is still alive and mentally competent. Limited power of attorney can be useful in many situations but can also have limitations.
Confirming the credibility of your chosen agent is crucial in protecting yourself and your assets. Ensure your agent is a trusted friend or relative that you know will make correct decisions for you. This is especially crucial if your agent could potentially have access to your financial or medical information. You can also appoint multiple agents to be power of attorneys if need be. While multiple agents ensure more security, disagreements tend to be more likely.
A limited power of attorney limits your agent’s authority to act only on certain matters and gives the agent very specific powers. Usually this form of power of attorney is used to authorize the agent to take a specific action, such as accept an offer to buy the principal’s house, use the principal’s car or care for the principal’s children. It does not give you any power after the principal becomes incapacitated.
As the name indicated, a limited power of attorney places specific limits on the attorney-in-fact. These limits can be whatever the principal desires. A principal can, for example, grant the attorney-in-fact the right to manage her finances while she is on vacation or grant a broader, though still limited, ability to manage her finances at all times.« Back to Glossary Index