A power of attorney document, as we have seen with Aunt Gertrude and her niece Milly, is a powerful document. Milly can do a world of good for her dear Aunt Gertrude, or she can misuse her power to enrich herself.
What if Aunt Gertrude decides that she wants to limit Milly’s ability to act on her behalf? Suppose Aunt Gertrude is concerned that she may be tempting Milly too much by giving Milly her checkbook. What can Aunt Gertrude do?
Aunt Gertrude can grant her niece a limited power of attorney.A limited power of attorney, as the name suggests, has some restrictions. Here are a few examples of ways in which a power of attorney document can be limited:
“This power shall not take effect unless I have been found to be incompetent by my physician.”
“My attorney in fact may not write a check or use cash from my account for more than $500.00 in a single transaction.”
“My attorney in fact may not access more than $2,000.00 in any thirty day period.”
“This power shall be in effect until I return from my vacation to Italy.”
By limiting the actions which Milly may take, Aunt Gertrude is protecting herself. . .or at least she is limiting the damage which can be done to her finances.
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