Financial Power of Attorney
This article provides information and answers to FAQs about financial power of attorney.
What Is Power of Attorney?
What Can My Agent Do for Me?
What Can't My Agent Do for Me?
Can My Agent Make Health Care Decisions for Me?
What Is a Durable Power of Attorney?
Who Can Be My Agent?
Does My Agent Have a Duty to Act on My Behalf?
How Do I Create a Legal Power of Attorney?
What Should I Do with My Completed Power of Attorney Document?
How Can I Revoke My Power of Attorney?
What Are Regular Accountings?
Once I Have Created a Power of Attorney Can I Still Act on My Own Behalf?
Where Can I Get More Information about Powers of Attorney?
A power of attorney is a legal document that allows one person (the principle) to give another person (the agent) the authority to handle financial and personal decisions. Creating a Power of Attorney does not require you to go to court.
You can give your agent the power to generally handle your financial affairs or you can give your agent power to only make specific decisions. Even if a Power of Attorney exists, the agent is still required to follow your directions. When an agent acts within the authority of the Power of Attorney, those actions are legally binding as if you took the action yourself.
You can draft your power of attorney to give your agent any or all of these general powers:
- Pay bills like your rent or mortgage
- Conduct your financial transactions
- Handle your investments
- Apply for public benefits on your behalf
- Hire care givers for you
- Make housing decisions for you
- Exercise your legal rights and conduct lawsuits
There are some things your agent can not do, unless you specifically say they can do them. These specific powers are listed here:
- The power to convey your real estate.
- The power to pay the agent out of your money.
- The power to make gifts or loans with your money to a third party.
- The power to make gifts or loans with your money to the agent.
- The power to appoint another person as an alternate or successor agent.
An agent cannot execute, revoke or modify a will or living will for you, even if you would like your agent to do this.
If your agent disagrees with you about what should be done with your financial affairs, he or she cannot act against your instructions.
You cannot give the power to make health care decisions as part of a financial power of attorney document. If you want to have someone make health care decisions for you, you should write an Advance Directive. An Advance Directive is sometimes called a "Durable Power of Attorney for Health Care". Your health care agent can be the same person as your financial agent, you just need two documents to do that.
You can find more information about Advance Directives on our Advance Directives page.
When a power of attorney is "durable" that means that it continues even after you become incapacitated or disabled. Most people will want their power of attorney to be durable. If you want the power of attorney to be durable, make sure it contains words like "This power of attorney shall not be affected by the subsequent disability or incapacity of the principal." The power of attorney form is durable only if you initial the line to make it durable. You still have the right to revoke a power of attorney, even if it is durable.
You can choose any adult to be your agent. You should choose a person you trust to make financial decisions for you. You should talk to that person first to make sure that he or she is willing to be your agent.
Its a good idea to name an alternative person to be your agent, if the first agent later becomes unable or unwilling to continue as your agent.
Yes. Your agent should only do things that you want and that benefit you. Agents have a "fiduciary" duty to protect your interests. Agents can be held liable if they don't act in your interests, or if they don't do want you ask them to do.
A power of attorney must be in writing. You can use this form or have a form drafted by an attorney for you. It must name the person that you wish to act as your agent. It must be signed in the presence of one or more witnesses. The witness or witnesses must sign the document. The agent must sign the document. You must bring it to a notary and sign it in the notary's presence. Most banks have a notary available to sign documents. Your agent's signature does not need to be notarized. Your agent can sign the document even if you are not present.
You can choose to have your Power of Attorney take effect when it is signed, or when some future event occurs.
First, talk to the person you picked as your agent. Talk to him or her about what you want and how you want help. You should also let family members know about your power of attorney. You should make copies. Keep one copy for yourself, give one copy to your agent, and give a copy to any institution your agent is likely to do business with (like your bank).
You can revoke your power of attorney at any time and for any reason. You can revoke the power of attorney in writing, by telling your agent, or by tearing it up or crossing it out or any other act that shows you want it revoked. To make things more formal, you can use this form to tell your agent that you are revoking the power of attorney. After you revoke your power of attorney you should also tell your bank and other financial institutions.
You have the right to revoke a power of attorney even if your agent thinks you have become incompetent or crazy. You do not have to be mentally "competent" to revoke a power of attorney.
You can have your agent give accountings about how they are handling your money. You can say how often they need to do this, such as every six months. The agent should list how they spent your money in the accounting. You can have these accountings sent to you or to someone else.
Yes. The power of attorney gives your agent the legal right to act on your behalf. However, it does not remove the power for you to act for yourself.
The Vermont Bar Association has information about powers of attorney on their website. They have a copy of the booklet Taking Charge available for download. You can find that information on the Vermont Bar Association website.
You can also call Vermont Legal Aid for more information about financial powers of attorney at (800) 889-2047.
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