Limited Power of Attorney in Estate Planning
A power of attorney (POA) is a document that authorizes one or more parties (known as the “agent” or “attorney-in-fact”) to act on behalf of a person (referred to as the “principal”). Most powers of attorney documents are guided by state law, which sets forth the POA form and the specific requirements regarding what defines a valid power of attorney.
Posted on March 17, 2023

What Is a Limited Power of Attorney?
A POA can be tailored to allow the agent to make only certain types of decisions. For example, a power of attorney can be used to allow another person to stand in your shoes and close a real estate transaction on your behalf. Powers of attorney that only allow an agent to do certain things are commonly referred to as a limited power of attorney.
A limited POA is usually limited to a timeframe, event, or specific purpose. As a result, it is only appropriate for some situations. For example, it is not the best option where you would like an agent to have a wide range of authority to handle your affairs with little restrictions.
FREE WEBINAR
5 Things to Know About
Estate Planning
When You Turn Sixty-Five
When Does a Limited POA Make Sense?
Common examples of where it may be a good option are:
- You are physically unable to handle specific matters — for example, you are out of the country, traveling, or ill.
- You need assistance with certain transactions where the agent you choose is a professional with specialized knowledge.
- You temporarily need an agent to be able to act on your behalf.
- You need an agent to act for you only for a specific transaction.
A limited power of attorney is a legally binding document. It should be carefully drafted to make sure it encompasses the limitations you have in mind. For example, in some states, unless you specifically state otherwise, a power of attorney (even if limited to certain acts) can still be in effect if you become incapacitated.
Choosing an Agent
When choosing an agent to appoint, it is essential to find someone trustworthy, who ideally knows your wishes and will work in your best interest, but can maintain an objective perspective. A capable agent will also be responsible and fair, and have strong organizational skills. Note that, for a fee, you can hire a professional to take on this role.
Each state’s laws and rules regarding what constitutes a valid POA and what responsibilities are conferred on an agent are unique. In addition, a power of attorney form must generally be executed in a specific manner to be valid. You should seek the assistance of a qualified estate planner in your area to prepare a valid power of attorney appropriate to your particular need.
More from our blog…
Is Your Financial Information in Order?
Preparing and organizing your financial information for when you are no longer capable will bring peace of mind to you today. At the same time, [...]
Why Parents Need a Power of Attorney When Children Turn 18
Every parent knows that momentous feeling when their child turns 18. It's a major milestone, symbolizing the transition from adolescence to adulthood. While it's a [...]
Can Alzheimer’s Disease Be Prevented?
While new knowledge becomes available each year about promising potential treatments for Alzheimer’s disease, recent research is also focusing on the prevention of the disease [...]
Bifurcating the Role of a Trustee: A Modern Approach to Trust Management
Trusts have long been a cornerstone of estate planning, wealth management, and charitable giving. Traditionally, the trustee held a singular role, overseeing and managing the [...]
Recent blog posts
FREE WEBINAR
5 Things to Know About
Estate Planning
When You Turn Sixty-Five