There are a number of types of Powers of Attorney, so don’t feel bad if you’re confused about the exact responsibilities a Limited Power of Attorney (LPOA) has. We’re breaking it all down here today, so you’ll have a firm grasp on things like what a Limited Power of Attorney (also known as a Special Power of Attorney or a Specific Power of Attorney) can do, why you may want one, what you need to know about them and more. Read on, as we’ll cover:
What is a Limited Power of Attorney?
A Limited Power of Attorney is a POA that’s set up for a limited time frame, generally for a limited purpose. A good example of when a Limited POA might be helpful is if you ever need someone to act on your behalf during a real estate transaction that you can’t be present for.
What Can a Limited Power of Attorney Do?
A Limited or Special Power of Attorney can act on a Principal's behalf during specific transactions or dealings, be they financial, business, healthcare or any number of other instances. Depending on the authority you grant them, an agent can:
Oversee and sign real estate transactions
Handle financial or business dealings when you’re out of town or otherwise unavailable
Step in to handle your finances if you were to become incapacitated
Sign contracts on your behalf
Why Would You Set Up a Limited Power of Attorney?
Setting up a Limited POA can be smart for a number of reasons. They can be a useful tool if you just want to be prepared for the unthinkable...like you become suddenly incapacitated. Or, they can be a great layer of protection for those times when you’re simply just unavailable. Ultimately, the power of a Limited POA comes from having someone you fully trust in a position to act as your Agent - handling both very simple, as well as extremely complex tasks.
It’s not uncommon to appoint an Investment Advisor as LPOA, so he or she has the legal authority to manage and make decisions regarding investments without any hesitation.
A huge benefit to a Limited Power of Attorney comes from the time restriction you can set as a provision. Traveling out of the country for a month? Establish a Limited Power of Attorney for just that timeframe!
What is the Difference Between Power of Attorney and Limited Power of Attorney?
Limited Power of Attorney differs from the regular POA or Financial POA most people are more familiar with. LPOA allows for greater restrictions and provisions and can be incredibly specific, which makes it a great tool for defined instances where a more blanket authority might be more than you need.
How Long is a Limited Power of Attorney Good For?
A Limited Power of Attorney is good for as long as you establish it. In contrast to a General POA, which expires only if you revoke it or once you pass away, Limited POAs are designed to be valid for a specific amount of time. This means you can set a date for it to lapse, and it will only be enforced up to that point.
How Do I Set Up a Limited Power of Attorney?
Setting up a Limited Power of Attorney isn’t difficult. You simply specify what power(s) you’re granting your Agent, and decide on the date those powers will expire. You can be as specific and granular as you like, or you can be a bit more general - ultimately, it just depends on what your goals and needs are.
To make sure it’s legally binding, it’s important to sign and date the LPOA and to have a witness or notary present. Check your state law regarding whether or not you need a notary.
Do you anticipate someone you love needing the support and protection a POA can offer? Wondering how do I apply for Power of Attorney? Establishing Power of Attorney can be accomplished in a few steps:
Check your state law
Determine what type of POA you need
Ensure you’re using the proper POA form
Have an open and honest discussion with the Principal (the person who actually needs a POA)
Determine what powers should be granted
Have the POA notarized (if necessary)
Distribute a legal copy to everyone involved
Limited POAs are a great way to extend the protection an Estate Plan offers. It ensures you’re covering all your bases should the unforeseen ever actually happen. And it also helps you plan for those times when you know you’ll need extra help navigating life.
Trust & Will makes setting up a Limited Power of Attorney as easy as possible, with state-specific forms and everything you need to establish Power of Attorney (or any other component of your Estate Plan!).
Is there a question here we didn’t answer? Reach out to us today or Chat with a live member support representative!