What is a Special Power of Attorney?

Daphne Mallory

A special power of attorney is called a limited power of attorney in various jurisdictions. It’s a document recognized by courts when properly executed, in which an attorney in fact is given certain power to act on behalf of someone who is unable to do those acts himself. A common reason for executing this power of attorney is that the grantor is not located in the region where certain financial, business, or legal transactions have to take place. The title of a special power of attorney can also indicate the limited duty of the agent, such as the financial power of attorney. Unlike a special power of attorney, a general power of attorney is a document in which the attorney in fact has broad powers to act in the best financial interests of the grantor.

A power of attorney document is often signed by a notary public.
A power of attorney document is often signed by a notary public.

There are a few ways that a special power of attorney can terminate. To begin with, the grantor can include an expiration date in the document, and all powers and rights granted to the agent will terminate on that date. The grantor can also rescind the power of attorney prior to the expiration date for any reason. The agent may also rescind the document, and some do so because they move away or are unable to continue to faithfully execute their duties. A special power of attorney terminates at the grantor’s death, and other legal documents granting powers and rights to individuals, such as a will, take effect.

A special power of attorney may allow someone to sign legal documents for another who is incapable.
A special power of attorney may allow someone to sign legal documents for another who is incapable.

The duties of an attorney in fact are often specified in the document and sometimes also in the title of the special power of attorney. The typical rights and powers are those associated with managing the grantor’s financial affairs. Some of the duties include entering into personal or business contracts on the grantor’s behalf, making deposits and withdrawals from bank accounts to manage the grantor’s money, and engaging in real estate transactions. The document may not enumerate all of the duties, but enough for the attorney in fact and the courts to determine what powers are within the scope of the agreement. An attorney in fact who performs tasks that go beyond the scope of the document is in breach of her fiduciary duties.

Each region has laws that govern the power of attorney, and those laws specify formal requirements for executing a valid document. For example, the grantor may need to obtain a certain number of witness signatures. A notary public may have to sign and seal the document in some jurisdictions in order for it to be valid.

Power of attorney agents may be empowered to conduct financial transactions on behalf of an individual.
Power of attorney agents may be empowered to conduct financial transactions on behalf of an individual.

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