Tuesday, June 19, 2012

What Is Limited Power Of Attorney?

A limited power of attorney, also known as a special power of attorney, is designed for a specific purpose. The person appointed as the agent does not have the broad authority or powers over the financial affairs of the principal that a general type form would give to them. But, the agent is authorized to complete the specific task that they have been granted the power or authority to do for the principal. This type of form is used by people for a financial transaction, health care or another need like the sale of real estate. However, the appointment of an agent in a limited type form will not give them any other authority or powers than those specified that could affect the finances or property of the principal.

A limited power of attorney can be given to a person or an organization. An organization can be appointed agent and granted the authority or power to do what is specified within the limited type form in the same manner as an individual is granted authority or power. The authority or power granted to the agent will last for as much time as needed to complete the specified task and can be revoked at any time by the principal. But, why do people use the limited type form? The main reason is to avoid giving the agent more authority or power than is necessary to complete the task. Limited powers of attorneys are allowed by state law. The powers that can be granted to the agent in this type of form include banking transactions, security transactions, real estate transactions and maintenance, debt management, handling government issues, business management, child care, financial decisions, endorsing paychecks or government checks. The powers are not limited to only the powers listed above, but there are many possible options when using a limited type form.

This limited type form is also routinely used by persons who want to give another person the authority or power to handle business decisions or financial transactions. For example, a business owner may be traveling outside the country for a business meeting, or there may be health issues that prevent him or her from completing a business task.

The execution requirements for a limited power of attorney may not be the same in different states. However, in most of the states, you will need to sign your form in the presence of a notary public. But, you can also revoke the limited type form at any time and for any reason. When a person has granted authority or powers to another person in a limited type form, the principal can still make his or her own decisions or do the same task that they have given their agent the authority or power to do, although the agent can complete the specific task for them too.

When a principal is choosing the person they want to appoint as their agent in a limited power of attorney, there are certain factors that should be considered. The agent should be a person the principal can trust and who will act in the principal's best interest. The agent can be a family member or a close friend or relative.

Article Source: http://EzineArticles.com/7117706

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