# Limited Power of Attorney (LPOA): Types and Forms

## What Is Limited Power of Attorney?

Limited Power of Attorney (LPOA) is an authorization that permits a [portfolio manager](https://www.investopedia.com/terms/p/portfoliomanager.asp) to perform specific functions on behalf of the account owner. In general, the LPOA allows the manager to execute an agreed-upon investment strategy and take care of routine related business without contacting the account holder.

Before signing an LPOA, the client should be aware of the specific functions they have delegated to the portfolio manager, as the client remains liable for the decisions.

## Understanding Limited Power of Attorney

LPOA authorizations have become more common in recent years as more investors choose boutique money management firms and [registered investment advisors](https://www.investopedia.com/terms/r/ria.asp) (RIAs) over traditional brokerage firms.

### Key Takeaways

*   A limited power of attorney allows a portfolio manager to make routine decisions without contacting the account holder.
*   The portfolio manager is never permitted to withdraw money from the account or change the beneficiaries.
*   An account holder may specify other exceptions to the limited power of attorney.

A limited power of attorney, [as opposed to a general power of attorney](https://www.investopedia.com/articles/personal-finance/101514/power-attorney-do-you-need-one.asp), restricts the authority of the designated individual to a specific sphere. In this case, the portfolio manager is empowered to execute an investment strategy as agreed upon with the account holder.

An LPOA gives the portfolio manager the authority to buy and sell assets, pay fees, and handle various necessary forms.

Certain critical account functions still can be made only by the account holder, including cash withdrawals and a change of [beneficiary](https://www.investopedia.com/terms/b/beneficiary.asp). A client can clearly state which other powers they may wish to retain at the time the account is set up.

### Limited Power of Attorney Types

There are a couple of variations on the limited power of attorney that may be used in special circumstances:

*   **Springing Powers**: An LPOA that has springing powers becomes active only if it is triggered by a specific event, usually the death or incapacitation of the account owner. It is typically used with a will or a family living trust.
*   **Durable and Non-Durable**: Durable LPOAs give the portfolio manager continuing authority to perform certain functions even if the client dies or becomes incapacitated. The majority of LPOAs are non-durable, which means they become void when the client dies or becomes disabled.

### Limited Power of Attorney Forms

Clients typically complete a [power of attorney](https://www.investopedia.com/terms/p/powerofattorney.asp) (POA) form when they open an account with a portfolio manager. Most forms give clients the option to choose between an LPOA or a full power of attorney.

> **Important**
>
> A limited power of attorney restricts the authorization to a specific sphere, such as investment management.

The client must designate an [attorney in fact](https://www.investopedia.com/terms/a/attorneyinfact.asp), who is usually the portfolio manager. Other portfolio managers who may make investment decisions on behalf of the client must also have their details provided on the form. Once completed, both the client and the attorney or attorneys in fact must sign the form.

A client who is uncertain or uncomfortable about what functions they are authorizing may want to get an attorney to review the POA form before signing it.