A general power of attorney gives an agent the power to handle your financial matters in your place. They can mostly do anything you could do, such as selling assets, transferring funds, or making gifts or investments.
A limited power of attorney can handle a specific task or set of tasks for you. There are several reasons you may want to limit your agent’s powers and several ways to go about doing so.
Let’s say you own a parcel of real estate in a different state and you want to sell it. You may not wish to travel out-of-state to handle the sale and sign all the legal documents.
You could give a power of attorney agent the power to handle this specific matter for you. In your power of attorney document, you could name the parcel of real estate and the powers you are granting the agent.
The agent would have any other powers over your finances or other properties.
Specific Time Period
You can create a power of attorney document that only gives your agent power for a limited period of time.
For example, you may be going on vacation for two weeks and don’t want to deal with any business or financial matters during this time. You could give your agent the power to handle your finances for this two-week period. Once you return, your agent would be stripped of their powers.
Powers of attorney are often used for incapacitation planning. If you were involved in an accident or experienced a sudden illness and became incapacitated, the power of attorney agent could step in and manage your finances.
However, some people would prefer to handle their own finances as long as they have the capacity to do so. A springing power of attorney can be used in these cases.
The agent has no powers while you are healthy and able to manage things by yourself. If something happens and you lose your capacity to manage your financial affairs, the agent’s powers “spring” into place.
Even if you want to give your agent power over most of your finances, you can also place some restrictions on them. For example, you may not allow your agent to make gifts of your property.
Talk to an estate planning attorney about how to choose which powers to give to your power of attorney agent.
The lawyers at King Law can help you plan for what happens after you’re gone, and we’re here to help you get a better sense of where you stand. We invite you to come in and talk with one of our attorneys in-person during a consultation. Our number is 888-748-KING (5464).