Special power of attorney

Special power of attorney
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Special power of attorney (also known as limited power of attorney) - means legally authorizing another person very often called an agent, to act for the principle with regard to specific transaction or a specific action. In finance, this entitles a specific person to take certain actions on behalf of the client on his account.

Limited power of attorney (LPOA) defines the exact areas of oversight, acceptable decision and action and frequently the period of time in which the person will represent you. The limited Power of attorney is used if you need to approve the transaction without the physical presence of the account owner. Through this type of power of attorney, an agent is appointed and can approve and make decisions about transactions of a part of the company. LPOA may also contain forms that allow to decide on finances for a limited period of time. This is one of the most popular types of powers of attorney because as a rule, most representatives precisely define the scope of the agent's rights (L. Ashar 2010).

Types of Power of attorney

Types of power of attorney:

  • special (limited) - a limited power of attorney is very much alike to general power of attorney however, the main difference is that it sets authorization limits on the agent that represents company.
  • general - a general power of attorney is limitless in scope and allows agent to act as legal representative in relation to the company's legal and financial affairs until revocation or termination of the authorization.
  • durable - it may be general or limited in scope. If it is general then it remains in effect after person become incapacitated. Without this power of attorney, if person become incapacitated, no one can represent him or her unless a court appoints a guardian. It may remain valid until death. However, if power of attorney specifically says otherwise, an agent's authority ends if the principal becomes mentally incapacitated. Then we say that it is a limited power of attorney
  • healthcare - this is one of the most popular form of power of attorney. Is based on the appointment of a person who will make decisions regarding the health care of a given person. The authorization conferred to the agent can cover any form of health care decision and it also applies even where person is nor terminally ill or permanently unconscious (Durable Limited Power of Attorney 2007).

The difference between General and Limited power of attorney

General power of attorney this is the type of proxy that allows the agent to conduct any type of financial transaction without any restrictions. The document becomes valid after being written off. The general power of attorney must authorize the agent to act for the owner in respect of all of his transactions, obligations and liabilities. The rights granted must be general so they should refer to its entire business activity or a specific part of its business. If these rights are not general, we can not speak of a general power of attorney (A.B. Kafaltiya 2010).

This two types of powers of attorney bring different rights. The Limited power of attorney as the name indicates this type of power of attorney imposes certain limitations on the attorney-in-fact. For example, the agent may manage the company's finances when the owner is absent. On the other hand, General power of attorney gives broad authorizations to the agent.This type of attorney, often called universal allows the attorney-in-fact to perform almost all activities and take most business decisions.

Summarizing the special powers of attorney are more detailed and specify the exact scope of powers that the attorney-in-fact has. It is worth noting that although the general power of attorney gives the agent a wide range of powers, there are still decisions that he can not make. For example, agent can not create a testament and make changes to an existing document, he can not vote in elections or perform certain tasks that require legal consent (M. Robinson 2019).

References

Author: Hanna Cugier