Monday, April 1, 2013

Why Use a Limited Power of Attorney?

A limited power of attorney is sometimes called special or specific because it is granting limited power for a special or specific purpose. With limited authority, the agent will not have broad authority over the grantor's finances and property but only the specific authority that is granted to him in this limited type of form.

At any time, a person may require this limited type of form to give another person the power to act in his or her place and to complete a specific task for them. It could be given by a business owner to another person so that the person can handle the responsibilities of managing the grantor's business while he or she is out of the country. Individuals, who are suffering from health issues, preventing them from completing all of their business responsibilities, may also use a limited power of attorney form to appoint someone as their agent to help them complete the work in their place and stead.

Different states have different requirements for executing this type of legal document. But most of the states require that you sign the document in the presence of a notary public. So, it is advisable to make sure that you are using an acceptable form with the correct acknowledgment when you have decided to prepare and execute this type of legal document. This type of legal document can also be revoked for any reason or when the task is completed. Though the grantor granted the agent the authority to take over some of his or her responsibilities, the grantor can continue to make those decisions and manage their affairs themself at any time.

A limited power of attorney is commonly used when conducting banking transactions, collecting debt, buying or selling real estate, investing in financial products and in negotiating with the IRS.

As the name suggest, a limited type of form is given when the task requires limited power. The agent or the recipient of the authorization or power is allowed to engage only in the tasks that are listed in the document.

When choosing an agent, the law requires that you choose someone who is at least 18 years of age. It is also important that the person you choose to be your agent is trust worthy. Depending on the task required of them, they may have access to your personal information like your bank account. Giving this information to an untrustworthy person may lead to theft. It is also important that the person you choose is capable of completing the task in a manner that is acceptable to you and with the outcome you are anticipating. So, make sure to talk to your prospective agent before including his or her name in your limited power of attorney document.

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