Definition of Limited Power of Attorney

Identification

• Like any power of attorney, the limited power of attorney is a document that reflects the authorization of one person to act on behalf of another. The person granting the authority is called the principal. The person being empowered is the agent, or attorney-in-fact. Limited power of attorney means the agent's authority is narrowly tailored and/or limited in duration.
  
  

Function

• Typically, the agent is a professional or some other person with particular knowledge and skills. Limited power of attorney authorizes the agent to act in specified fields, such as stock and real estate transactions.
  
  

Features

• The essential features of any power of attorney form are the identification of the parties (the principal and agent) and the description of the powers granted. In a limited power of attorney, the authorizations can be specifically enumerated or linked generally to a specific type of property. For example, a limited power of attorney may grant a stockbroker control over a brokerage account, but absolutely no authority otherwise.
  
  

Time Frame

• The limited power of attorney is usually a temporary, revocable agreement. Unless specifically designated as a durable power of attorney, it becomes invalid in the event the principal is incapacitated. Quite often the date or conditions of expiration are included in the limited power of attorney document itself. Otherwise, the power of attorney can be revoked at any time by the principal.
  
  

Making It Official

• The power of attorney document must be witnessed and notarized, and certified copies made for distribution. It does not have to be registered with a court or government agency to take effect. However, copies usually must be deposited with the bank, broker, Realtor, title agency and other organizations with which the agent interacts.