Durable And Limited Power Of Attorney - Key Differences

Although most people leverage an estate plan to ensure their wishes are respected after death, it can also help protect your interests while you’re still alive. This is made possible primarily through the legal instrument referred to as a power of attorney.

While you may be familiar with the basics, you may not know that there are different types you can use for numerous purposes, such as the durable and limited power of attorney.

But the real question is what is a limited power of attorney and how does it differ from a durable one?

Defining a Power of Attorney

Before divulging what is a limited power of attorney, let’s go over the basics. A power of attorney is a legal tool that allows one person to designate an agent to act on their behalf in various situations. Commonly, power of attorney is used by individuals designating other people to perform transactions on their behalf or sign real estate documents. 

In addition to healthcare power of attorney, which only addresses medical decision-making, there are durable and limited powers of attorney. Because of the sheer number of options available, it’s imperative to always consult an attorney who can advise you on the type of legal document that works best in your particular situation. Using the wrong power of attorney can be problematic as it could leave the agent with too little or too much control.

What Is a Durable Power of Attorney?

A durable power of attorney provides the agent with broad authority over different matters. The agent can, for instance, conduct financial transactions such as filing taxes or signing checks, along with the power to make several other decisions in many legal situations. 

Put differently, once you sign a durable power of attorney, the agent is authorized to make any real estate and financial decisions. 

This is why you need to take great care when assigning this role. The person must be trustworthy and capable of meeting your needs. Generally speaking, the durable power of attorney stays effective until the principal revokes it or passes away.

What is a Limited Power of Attorney?

Limited power of attorney works similarly to a durable power of attorney, in that it provides an agent authority over certain matters. However, the difference is that the effect of the power of attorney is limited to a timeframe and the scope of authority outlined in the document.

For example, if you’re traveling for an extended period, you can use a limited power of attorney to see to it that your financial matters are taken care of while you’re away. Alternatively, you can use it for real estate transactions, and it’s also effective if you’re incapacitated and need someone to take care of business decisions on your behalf until you recover.

As you can see, a limited power of attorney can be as wide or narrow in scope as you want it. You can decide on the authorization date, after which the document is no longer valid, but you can also go one step beyond and decide on more specific details. For instance, your agent can only be authorized to act in a specific situation. You can provide power of attorney to your financial advisor and they can handle only your investment transactions.

There’s even a possibility to authorize someone only to sign the documentation for one transaction. This is beneficial when you want a real estate agent to handle the closing of a property for whatever reason (e.g. you live far away).

A limited power of attorney is a great way to eliminate any potential for power of attorney abuse and protect your interests while also having the full benefits of a regular power of attorney document. Let’s go back to the example of the real estate agent - you won’t have to worry about them using their authorization to sign other documents as their powers are only limited to signing one specific document described in the terms of the power of attorney. 

Requirements for Creating a Power of Attorney

Whether you’re creating a durable or limited power of attorney, the legal criteria will be identical.

If you want the document to be effective in Florida, you’ll have to create it under Floridian law, rather than the law of another state. In other words, if you have a power of attorney in another state but want your agent to take care of your affairs in Florida, you should create a new power of attorney in the Sunshine State.

When it comes to the agent, they can be anyone over the age of 18. As we mentioned previously, there is no restriction on who can fulfill this role and it’s common practice to give limited power of attorney to lawyers, real estate agents, and financial advisors.

Lastly, for a power of attorney to be effective in Citrus Capital, it needs to be signed in the presence of two witnesses and a notary public.

Which Type of Power of Attorney is Right for You?

Now that you know what is a limited power of attorney, it’s perfectly normal to be on the fence regarding which one is right for you. The answer is underwhelming - it depends on what you want to achieve.

In case you need to handle a one-off transaction or achieve a specific goal, then limited power of attorney is the right choice for you. On the other hand, if you want to protect yourself and your family’s future interests, then a regular old durable power of attorney is better. 

Sure, you may feel suspicious of providing someone with such authority, but if you hire a qualified estate planning lawyer, they can put together a power of attorney document that stops the agent from exercising the power of attorney for their own needs.

Here at the Law Offices of Mary E. King , we have twenty years of experience in such matters, so creating a power of attorney tailored around your needs (and concerns) is no problem for us. An estate plan should instill you with confidence and not fear, and we’re here to help you achieve that.

Schedule an appointment by calling 941-906-7585 or filling out our contact form.

Note: 

The information in this blog post is for reference only and not legal advice. As such, you should not make legal decisions based on the information in this blog post. Moreover, there is no lawyer-client relationship resulting from this blog post, nor should any such relationship be implied. If you need legal counsel, please consult a lawyer licensed to practice in your jurisdiction.