What Is Special Power of Attorney?

A power of attorney is a legal document that allows an individual to give another person the authority to act on their behalf. A special power of attorney limits the authority so that the person acting on another’s behalf can only do so in specific situations. 

A special power of attorney can be a better option than a general power of attorney in some situations such as single transactions—learn why and how it works.

Definition and Example of Special Power of Attorney

When a legal adult (“the principal”) wants to give another adult (“agent” or “attorney-in-fact”) the right to act on their behalf, they must sign a power of attorney legal document. However, the type of power of attorney used will depend on the situation. A special power of attorney allows the agent to be able to act on the person’s behalf only in a specific situation.

• Alternate name: Limited power of attorney
• Acronym: Special POA

For example, if you are selling your home in California but you live in New York, you could give your real estate agent special power of attorney to sell your home. Once the transaction is over, the agent would no longer hold the power to act on your behalf. 

How Special Power of Attorney Works 

A special power of attorney is typically put in place by filling out the form your state or local government provides, getting the document notarized (you and your agent have to sign the form in front of a notary), and making copies for all parties involved in the special POA. In some cases such as transferring property, you may have to record the special POA with your county recorder. Otherwise, it goes into effect once it’s signed, notarized, and given to the parties involved.

The form will enable you to name the person you want to give agency to, the powers you want to assign, and the duration of the agent’s right to act on your behalf. In many cases, people use a special power of attorney for the following situations:

• Purchase a car
• Buy or sell real estate
• Admit your child to the hospital for necessary care
• Sign your name on a lease and utility agreement
• Transfer stocks or bonds
• Cash or deposit tax refund checks
• Sign your paycheck
• To withdraw money from your bank account

Special power of attorney can be helpful if, for example, your child is staying with a relative while you’re on a business trip and needs medical attention. You could authorize your relative to take your child to the hospital and get the necessary care. 

In real estate transactions, you can authorize your real estate agent to act on your behalf while buying or selling property for you. This may be necessary if you are buying property in another state and time is of the essence. You can assign an agent special power of attorney so they can sign the necessary contracts and legal documents for you. 

How To Cancel a Special Power of Attorney

If at any time, the agent does anything on your behalf that goes beyond the scope of the special power of attorney or you just want to cancel their power, you can write and sign a document saying you revoke their power.

General Power of Attorney vs. Special Power of Attorney

In contrast to the special power of attorney, a general power of attorney grants your representative broader power to act on your behalf in almost any situation. However, states may restrict certain highly personal actions. For example, North Carolina doesn’t allow an agent to execute a will or get married using power of attorney.

Aside from a few exceptions, an agent with a general power of attorney will be able to do much more on behalf of an individual than one with a special power of attorney. This may be useful in certain situations such as when an elderly person can no longer manage their affairs so they entrust their child to handle them. Instead of giving the child special power of attorney to deposit checks and cash, a general power of attorney could give the child the power to control all banking transactions.

However, while power of attorney can be helpful, it can also be abused. A general power of attorney should only be put in place when absolutely necessary. Otherwise, it’s best to limit the powers with a special power of attorney. Further, ensure you trust the individual to whom you give any kind of power of attorney and be sure to include an expiration date.