Do I need a general power of attorney or a limited one?

By | May 13, 2008

A power of attorney is a document giving a trusted friend or lawyer the right to perform any legal act on your behalf. Anyone should be very cautious about utilizing these documents, as the person holding the power can literally perform any transaction in your absence. However, many times this grant of power is absolutely necessary to handle matters when you are not able to handle them yourself.

A general power of attorney gives the party you assign the right to transfer funds, buy and sell property, and completely run every aspect of your affairs. This may be utilized if you are going to be absent and need someone to fill in for you regarding all financial and real estate matters, or if you are expected to be disabled for an extended period of time, and personal financial decisions and allocations simply cannot wait. You need to make sure that whomever you are assigning this responsibility to is someone that you have absolute trust in to carry out your wishes and disregard any temptation toward personal enrichment. A limited power of attorney also grants another person the power to sign documents and carry out transactions for you, but with a more specific capacity. For instance, the document could state that the assignee would only have the right to sign a deed transferring a specific property to a third party during a predetermined time period and allow no other rights or privileges with your affairs. If you are simply asking someone to carry out a single task for you, this power delegation is a far smarter choice, because it protects you from being taken advantage of in every other area. The rule of thumb with power of attorney documents is to lean on the side of caution at all times, deciding which format is best for you.

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