A Limited Power of Attorney, also called a Special Power of Attorney, is a legal instrument that grants an agent narrowly defined authority to perform specific acts or transactions on the principal's behalf. Unlike a general POA that conveys broad powers across all financial and legal matters, a limited POA restricts the agent's authority to particular tasks, transactions, or time periods expressly stated in the document.

The legal foundation for limited powers of attorney derives from common law agency principles codified in the Restatement (Third) of Agency and supplemented by state-specific statutes. Under UPOAA Section 201, a principal may grant authority with respect to specific subject matters, and any powers not expressly enumerated are not conferred. Courts strictly construe the scope of a limited POA, meaning the agent cannot exceed the specific authority granted, even if doing so would benefit the principal.

A limited POA automatically terminates upon completion of the specified task, expiration of the stated time period, or revocation by the principal. Unlike durable POAs, most limited POAs are non-durable by default, meaning they terminate upon the principal's incapacity unless durability language is expressly included. Third parties such as banks, title companies, and government agencies frequently accept limited POAs more readily than general POAs because the narrow scope reduces the risk of unauthorized transactions.

Real estate closings are the most common use case. When a property buyer or seller cannot attend the closing in person due to travel, illness, or scheduling conflicts, a limited POA authorizes someone to sign the deed, settlement statement, and closing documents on their behalf. Title companies and lenders typically require the POA to reference the specific property address and transaction.

Vehicle transactions frequently involve limited POAs, allowing a designated person to complete title transfers, registrations, or sales at the Department of Motor Vehicles. Financial transactions such as accessing a specific bank account, executing a single stock trade, or cashing a particular check can be handled through a limited POA without exposing the principal's entire financial portfolio to agent authority.

Business owners traveling internationally use limited POAs to authorize employees or partners to sign specific contracts, execute particular agreements, or represent the company at a single closing. Tax professionals receiving limited POAs can file returns or respond to IRS inquiries on behalf of taxpayers, though the IRS has its own Form 2848 for this purpose. Legal proceedings also warrant limited POAs when a party cannot appear for a deposition or document signing.

The specific grant of authority must describe the exact transaction, act, or matter the agent is authorized to handle. Vague language like "handle my affairs" converts what should be a limited POA into a general one, creating unintended exposure. Identify the precise property address, account number, vehicle identification, contract reference, or transaction details involved.

The expiration date or terminating event defines when the agent's authority ends. A limited POA for a real estate closing might expire 30 days after execution or upon completion of the closing, whichever occurs first. Without a clear termination provision, disputes arise over whether the agent retains residual authority after the intended task is complete.

The principal and agent must be fully identified with legal names and addresses. Limitations and restrictions should explicitly state what the agent cannot do, not just what they can. For example, authorizing an agent to sell a vehicle but prohibiting acceptance below a stated minimum price.

Notarization is required in most states and is practically mandatory for real estate and financial institution transactions. Many institutions require that the limited POA be executed within a recent timeframe, often 90 days or less, to accept it. A governing law clause, acknowledgment that the principal is acting voluntarily and with legal capacity, and the principal's signature complete the essential elements.