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Legal Definitions - limited power of attorney

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Definition of limited power of attorney

Limited power of attorney is a legal agreement that allows one person, called the agent or attorney in fact, to act on behalf of another person, called the principal. This agreement is limited to specific activities and decisions that the principal authorizes.

  • A principal may grant limited power of attorney to their spouse to handle their finances while they are out of the country. The spouse can only make financial decisions and cannot make any decisions regarding healthcare or legal matters.
  • A principal may grant limited power of attorney to their adult child to sell their car while they are away on vacation. The child can only sell the car and cannot make any other decisions on behalf of the principal.

These examples illustrate how limited power of attorney is used to give someone else the authority to act on behalf of the principal for specific tasks or decisions.

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Simple Definition

Term: Limited Power of Attorney

Definition: Limited power of attorney is when one person gives another person permission to make decisions for them, but only for certain things that they have agreed on beforehand. The person who is giving permission is called the "principal" and the person who is making decisions is called the "agent" or "attorney in fact". The agent can only make decisions about the things that the principal has agreed to and nothing else. The principal doesn't have to choose a lawyer to be their agent, they can choose anyone they trust who is an adult. To give limited power of attorney, the principal just needs to fill out a form and follow the rules in their state for witnesses and notarization.

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