Limited Power of Attorney for Finances
Limited Power of Attorney for Finances
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A limited power of attorney is a simple, one-page form that gives someone you trust authority to act on your behalf. To complete it, all you need to do is fill in information about you and the person you're naming as your "attorney-in-fact" or agent. You'll also spell out the authority you're granting that person. For example, you could use this limited power of attorney to give authority to:
- sell your car and sign over the title to the new owner
- manage specific investments while you’re out of the country
- sign loan papers for you while you're in the hospital
- or any other specific financial task
A power of attorney is a commonly used document, and third parties (the person buying your car, for example) will probably accept it readily. Just in case they're worried about relying on it, the document contains language (called an indemnification clause) that lets them know they can legally rely on the document.
- What does a limited power of attorney do?
- What doesn't a limited power of attorney do?
- Will I need witnesses?
- Should my agent sign the document?
- How do I finalize my power of attorney?
What does a limited power of attorney do?
This document is a "limited" power of attorney, which means that you should use it for specific, limited purposes. For example, you might want to give someone authority to sign a lease for you while you're out of town, or to write checks to pay your bills while you're recovering from minor surgery. When you make the document, you'll spell out your agent's authority.
Your agent's authority ends on the date you specify in the document, or you can revoke it earlier if you choose.
A limited power of attorney will automatically end under certain circumstances, including:
- Your agent resigns or dies, or is unable to act on your behalf for some other reason.
- You become incapacitated -- that is, because of a physical or mental problem, you cannot handle your own financial matters.
- You die. After your death, your agent has no power; the executor you name in your will, or someone appointed by the probate court, will have authority over your assets.
- In some states, a power of attorney is automatically revoked if you get divorced and your spouse was your agent.
What doesn't a limited power of attorney do?
You need a different document if you want to:
Give your agent authority over real estate. If you want to give someone authority to buy, sell, or manage real estate on your behalf, use a power of attorney for real estate.
Plan for possible incapacity. Your agent's authority automatically ends if you die or become incapacitated. If you want to grant someone authority that will stay in effect if you someday become incapacitated (for example, if you develop dementia), then you need a different document, called a durable power of attorney.
Will I need witnesses?
Some states require you to sign your power of attorney in front of a witness or two. If so, your document will print out with blank lines for the witnesses to sign. You and the witnesses must appear together in front of a notary public. The notary will watch each person sign and will then complete and attach an acknowledgment certificate.
Witnesses must be legal adults, 18 or older. Your agent may not be a witness.
Here are state rules on witnesses:
Arizona: one witness, who cannot be the spouse or child of your agent or the notary public Connecticut: two witnesses Florida: two witnesses Georgia: two witnesses, one of whom may not be your spouse or blood relative Illinois: one witness New York: two witnesses -- but use a special New York form, not this form Oklahoma: two witnesses, who may not be related by blood or marriage to you or your attorney-in-fact Pennsylvania: two witnesses -- but use a special Pennsylvania form, not this form South Carolina: two witnesses Vermont: one witness, who cannot be the notary Wisconsin: two witnesses, who cannot be related to you by blood or marriage or anyone entitled to inherit under your will
Should my agent sign the document?
In a few states, your agent must sign the power of attorney before taking action under the document. In other states, the agent's signature is not required, but it's a fine idea to include it anyway. The agent's signature acts as assurance that the agent has read and fully understands the document, and is willing to assume to responsibility of acting prudently and honestly on your behalf. For this reason, Nolo's limited power of attorney form includes a blank line for the agent to sign.
How do I finalize my power of attorney?
Your limited power of attorney will print with a page of instructions explaining how to sign the document and have it witnessed (if necessary) and notarized.