Paralegal Advanced Competency Exam (PACE) Practice Exam

What kind of power does a general power of attorney give to the agent?

1. Specific transactional authority

2. Limitless power without restrictions

3. Power only for signing documents

4. Broad and unrestricted authority

The correct answer is: Broad and unrestricted authority

A general power of attorney grants the agent broad and unrestricted authority to act on behalf of the principal in a variety of matters. This includes making financial decisions, managing financial accounts, handling transactions, and conducting business operations, among other responsibilities. The key aspect of a general power of attorney is its comprehensive nature, allowing the agent to perform nearly all acts that the principal could do personally, provided that these acts are legally permissible. This type of power of attorney is often utilized when an individual wishes to delegate decision-making authority to another person, especially in situations where they may not be able to manage their own affairs, such as due to health issues or being out of the country. Although the principal can specify limitations within a general power of attorney, the standard interpretation is that it confers wide-ranging authority. In contrast, the other options suggest more limited forms of authority. Specific transactional authority denotes a power granted for distinct, defined actions, and a power limited to signing documents restricts the agent to only executing signatures, which does not capture the essence of a general power of attorney. Thus, the characterization of the general power of attorney as granting broad and unrestricted authority is what makes this choice the most accurate.