Paralegal Advanced Competency Exam (PACE) Practice Exam

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What does a general power of attorney encompass?

Narrowly defined actions for specific decisions
Powers limited to financial transactions only
Broad powers allowing various actions by the agent
Authority that ceases upon the principal's incapacitation

The correct answer is: Broad powers allowing various actions by the agent

A general power of attorney grants broad authority to an agent, allowing them to perform a wide range of actions on behalf of the principal. This can encompass various decisions, including financial, legal, and personal matters, effectively enabling the agent to manage the principal's affairs in many areas of life. The scope of the powers under a general power of attorney is intended to give the agent the flexibility to act as needed without requiring the principal to specify each individual action or decision. In contrast, powers that are narrowly defined or limited to specific decisions or transactions would fall under a special or limited power of attorney. Additionally, while financial transactions may be included in a general power of attorney, the instrument is not restricted solely to financial matters. It's essential to note that a general power of attorney typically does not cease upon the principal's incapacitation unless it is specifically designated as a non-durable power of attorney. In most cases, a durable power of attorney survives the principal's incapacity, allowing the agent to continue acting on behalf of the principal.