A Power of Attorney (POA) is one of the most powerful—and practical—documents in your estate plan. Unlike a will or trust that typically takes effect later in life or after death, a POA comes into play while you’re still alive, often during an illness, injury, or period when you can’t manage your own affairs.
At Duncan Legal, PC, we help individuals and families prepare for both the expected and the unexpected. Understanding the difference between general and limited authority can help you confidently choose the type of POA that aligns with your values, needs, and peace of mind.
What Is a Power of Attorney?
A Power of Attorney is a legal tool that allows you (the principal) to authorize someone you trust (the agent or attorney-in-fact) to act on your behalf. This authority can be applied to a variety of situations—from managing bank accounts to selling property, depending on how the POA is structured.
In this article, we’ll focus on financial powers of attorney—and how to choose between general and limited authority.
General vs. Limited Power of Attorney
General Power of Attorney
A general financial POA gives your agent broad authority to manage most, if not all, of your financial affairs. This can include:
- Accessing and managing bank accounts
- Paying bills and handling investments
- Buying or selling real estate
- Filing taxes or applying for benefits
- Making financial gifts (if authorized)
This type of POA is common in long-term planning—particularly when adult children help parents with finances, or between spouses facing medical issues or frequent travel. However, because of its wide scope, a general POA requires a high level of trust and often includes more legal risk if not properly limited.
Limited (or Specific) Power of Attorney
A limited POA restricts your agent’s authority to specific actions or situations. Examples include:
- Allowing a CPA to communicate with the IRS
- Empowering someone to handle a real estate closing
- Granting temporary access to manage bills during surgery or travel
Limited POAs provide control and security by clearly outlining what your agent can and cannot do. It’s an ideal choice if you want targeted help without relinquishing broader financial authority.
How to Structure a Limited Power of Attorney
There are three main ways to customize a limited POA:
- Specific Actions
Define what the agent can do—such as signing one contract or managing a single account. - Time Limits
Set a clear duration for the POA—like during a trip or a temporary recovery period. - Triggering Events (Springing POA)
Create a POA that becomes effective only when a specific event occurs—typically, a formal diagnosis of incapacity.
Springing POAs offer the comfort of control today while providing support if your ability to act changes in the future.
Which Option Is Right for You?
Choosing between a general or limited POA depends on your situation, your level of comfort, and the responsibilities you want your agent to have.
- General POAs offer flexibility and ongoing support.
- Limited POAs provide more structure and control.
Either way, it’s critical to choose someone you trust, communicate your wishes clearly, and revisit your POA periodically—especially after major life events like retirement, divorce, or relocation.
Stay Compliant With Colorado Law
As of 2024, many states—including Colorado—have updated laws governing POAs. New requirements include:
- Explicit gifting and fiduciary language
- Updated agent duties
- Clear notice provisions
An outdated POA may not be recognized or enforceable. That’s why it’s important to work with an estate planning attorney who understands your state’s current requirements.
Final Thought
A Power of Attorney isn’t just paperwork—it’s a critical part of protecting your finances and your future. Whether you’re looking for comprehensive support or narrowly tailored authority, Duncan Legal, PC is here to help you put the right plan in place.
Let’s make sure your POA reflects your values, your needs, and your future.
Visit Us: 6436 S Racine Cir, Ste 227, Centennial, CO 80111
Call Us: (303) 394-2358
Learn More: www.duncanlegal.com
Duncan Legal, PC
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