Limited Power Of Attorney

What Is A Limited Power Of Attorney

A limited power of attorney (POA) is a legal document assigning power to someone else on your behalf that can be used for a specific event or time period. They are used for situations where you want to designate your attorney-in-fact to perform an action on your behalf due to their specialty or proximity to an event.

In this situation, the principal will define the following on the document:

  • The Principal: The person who is allowing another person to make decisions on their behalf for a specific matter.
  • Attorney-in-fact: The person that will be making decisions for the principal for the listed event mentioned.
  • Itemized list of relevant subjects: All matters the attorney-in-fact are allowed to act upon listed in detail and any limits they must adhere to.
  • Account numbers: If the matter is related to property or financial accounts, the identification codes assigned to the relevant assets must be listed, otherwise, the attorney-in-fact will not be allowed to handle them.
  • Specific time period: The time period in which they can act as the attorney-in fact. This can include beginning/end dates, the end of a process, or other delineated timeline.


Witness signatures, notarization, and possibly other certifying requirements will be needed. You may need to check with a notary, lawyer, financial agent, or other expert to learn what your state requires to make your limited POA legally binding.

Restricting Attorney-In-Fact’s Powers

Limited POAs are unlike durable power of attorney forms in that they allow the principal to restrict the scope of power to the attorney-in-fact on what they can and cannot do with their legally appointed abilities. The purpose is to make sure that they perform their duties in the manner you intended.

For example, in a vehicle buying situation, you may sign a limited POA during the buying process. This allows the dealership’s staff (acting as your attorney-in-fact) to work with the government agencies on your behalf to complete the digital and physical paperwork to change the title of the vehicle over to you.

The document may also allow the dealership to change an existing license plate, or register for a new license plate for you. If you are financing the vehicle, the dealership can work with the bank to process the necessary loan paperwork.

Once processed, the limited POA is then nullified per the terms of the agreement set forth on the document.

The limited POA document may have language in it showing you what the dealership cannot do from a legal standpoint. It could talk about how it will honor its agreement and not substitute another vehicle for the one that you have agreed upon. The limits may also talk about how their processing power is only allowable to this particular to this transaction.

The restrictions that the document delineate are detailed and focused on the idea that the dealership is acting on your behalf and working within the intentions that both you have agreed upon.

When Do You Need A Limited POA

There are many reasons why a limited POA is useful. The goal of a limited POA is to use this document to have an expert you have hired or a trusted person have authority complete legal matters on your behalf for a certain matter. Besides the vehicle purchase example above;

  • During the buying process of real estate, you have the option to sign a limited POA to allow the titling agency to handle the legal paperwork to properly transfer the title into your name and the mortgage paperwork to your bank of choice.
  • In some financial situations, you can sign a limited POA allowing your financial advisor to buy a certain amount of shares of a specific investment at the right time, according to their expertise.
  • In other investment situations, you could sign a limited POA allowing your financial broker to handle legal documentation on your behalf after you have decided to make a transaction.
  • In a business setting, if a key decision-maker will not be available, this document can be used to allow a substitute to act on their behalf and what actions they can take.
  • If you are going to be away, a limited POA can allow your child’s guardian to make certain care decisions in your absence.

The point is, this version of a POA, like the other types, allows your appointed attorney-in-fact to make legal decisions on your behalf. The difference is the principal can restrict their decision-making power to one specific event for a certain length of time.

When Do You Not Need A Limited Power Of Attorney

Before you scare your babysitter at your front door with a notary and two witnesses, there are times when you do not need a limited POA. In this situation, more than likely, if something happens to your children, you are going to head out to wherever you need to be. With current cellular technology, you can be on the phone making decisions with whoever you need to talk too.

The goal of a limited POA (or power of attorney in general) is to appoint someone you trust with major decisions that usually fall within the financial, health, or other major decision when you are unable to make decisions at the time.

The primary reasons with a limited POA would be either you do not have the expertise to handle the situation, the time to handle it, or you will not be available to sign documentation during a certain time period.

Other types of POAs may be better if for all encompassing situations that deal with your mental or physical health, periods of time that have no end date, or matters that you feel need a permanent attorney-in-fact to handle.

If you decide that this is the correct power of attorney for you, make sure that you make multiple forms to allow all parties to have a copy.