The Oxford dictionary defines a Power of Attorney as “the authority to act for another person in specified legal or financial matters”.
Simply speaking, a Power of Attorney establishes a fiduciary relationship between two individuals – the principal and named representative [attorney-in-fact].
There are, broadly speaking, two types of Powers of Attorney. A general Power of Attorney is unlimited in scope and authorizes the attorney-in-fact to handle all of the principal’s affairs. A specific Power of Attorney only allows the attorney-in-fact to conduct specific business affairs for the principal by imposing restrictions on him or her; it may even confine the scope of that person’s powers to a single transaction. For example, the attorney-in-fact could be granted the power to engage in financial transactions from a specific bank account or to sign the closing documents for a particular real estate transaction.
The Power of Attorney is therefore tailored to meet the requirements of a particular transaction or transactions and details the expiration date and full extent of power. Most people prefer a specific Power of Attorney because with this form, the principal can authorize someone to manage his or her finances or property, and yet be secure in the knowledge that his or her assets are protected.
A specific Power of Attorney usually reads: “By this document it is hereby acknowledged, that I, [name of person granting power of attorney] of [city, state], the undersigned, do hereby grant a limited and specific power of attorney to [name of person granted power of attorney] of [city, state] as my attorney-in-fact. The said attorney-in-fact shall have authority and the power to undertake and perform only the following acts on my behalf: [list specific acts the attorney-in-fact is authorized to perform]…”
Unless revoked, a specific Power of Attorney ends at a stipulated date, unless if the principal becomes incapacitated or passes away.By: KENT PINKERTON