This page provides an overview of the powers an agent has under a financial power of attorney. This type of power of attorney or POA relates to a person's money, property, and other assets. For an overview of how a power of attorney is used in estate planning, go to financial decisions.When you decide to make a financial power of attorney, your first consideration should be what powers will be granted to your agent. While you may have complete confidence and trust in the person you plan to appoint as agent, it is never a good idea to grant such authorization without the advice of your own lawyer because of power of attorney risks.
A financial power of attorney does not apply to medical decisions, living wills or the right to die. For the steps required to appoint an agent to make medical decisions on your behalf, see health care POA.
What Are the Powers of an Agent Under a Power of Attorney?
The answer depends on the following:1. The type of power of attorney. For example, is it a limited power of attorney or a general power of attorney. The difference between these two types of power of attorney forms is explained on our granting power of attorney page.
2. The specific powers granted in the document. When you make a power of attorney, you have the discretion to grant certain powers and withhold certain powers. You may also place restrictions on some powers.
The grant of powers is set forth in the power of attorney form. If your power of attorney is drafted by a lawyer, the powers will be those you decide to grant based on your discussions with the lawyer. If you use a do it yourself power of attorney form, you will be using a check the box or strikethrough format to define the agent's powers. Regardless of the form of POA document, the only way to determine an agent's powers is to read the entire document.3. Applicable state laws. Each state makes its own laws governing powers of attorney. Applicable
state laws may place limitations on an agent's power. State law also determines the rights and duties of third parties that are asked to engage in transactions with an agent.Copyright 2020 Pennyborn.com. ALL RIGHTS RESERVED.
Defining Your Agent's Powers in a Power of Attorney Form
While the powers listed above are typically granted in a general power of attorney, you do not have to grant all these powers in your power of attorney. Consult a lawyer about which powers are appropriate and necessary in your situation. A lawyer can draft a document custom tailored to your estate planning objectives that takes into consideration any concerns about the person you plan to name as agent. If you plan to use a power of attorney form or estate planning software, carefully review the entire document. If you wish to remove some of the powers shown on the form, follow the execution instructions to withdraw or restrict those powers.
Powers You May Wish to Grant Your Agent in a Power of Attorney Form
A general power of attorney for finances typically authorizes your agent to take the following actions on your behalf: 1. Pay rents, mortgages, insurance premiums, and other bills and expenses. 2. File tax returns and pay taxes. 3. Apply for government benefits, such as Social Security and Medicaid. 4. Collect income, compensation, employee benefits, and payments owed to you, including cashing and depositing checks. 5. Open and close accounts at banks, brokerage firms, and other financial institutions, including safe deposit boxes. 6. Sell all types of property, including real estate, stocks, bonds, vehicles, jewelry, and home furnishings, and release mortgages and liens. 7. Take out loans and encumber assets. 8. Change how title to property is held, including executing deeds and changing account registrations. 9. Manage and change investments, including selling and buying securities, investing more capital in a business, and voting shares of stock. A financial power of attorney document may also authorize the agent to execute Stock Powers. 10. Hire services, such as legal, financial, and home repair services. 11. Engage in transactions regarding insurance and annuities. 12. Sign contracts for assisted living and other housing arrangements. 13. Make gifts, whether as part of an estate tax strategy or otherwise. 14. Engage in transactions to manage, sell or close a business. 15. Exercise a power of appointment. 16. Disclaim an inheritance.
If You Have a Living Trust
The powers of an agent discussed on this page refer to assets owned in your name. If you have a living trust, some or all of your property may be titled in the name of your trust, rather than your name as an individual. If you are the trustee of your living trust but are unable to manage your affairs, the successor trustee of your living trust will have authority to manage living trust property, provided your living trust includes provisions to have a successor trustee manage your affairs during incapacity.
INFORMATION ON THIS SITE, INCLUDING ARTICLES, ESTATE PLANNING FORMS, AND THE ESTATE PLANNING BLOG, DOES NOT CONSTITUTE LEGAL, FINANCIAL OR TAX ADVICE. Pennyborn.com is not a law firm and is not a substitute for a lawyer. Your use of this site does not create an attorney-client relationship. Information on this site is for educational purposes only and may not be accurate, complete or up to date.
For information about Pennyborn.com and how to advertise on this website Contact Us.