Financial Power of Attorney: What You Can and Can't Do
Your authority as a financial POA has real limits. Here's where the line is, and how to stay on the right side of it.
What a financial POA actually is
A Financial Power of Attorney lets you act on someone's behalf for money and property — but only while they're alive, and only within the powers the document spells out.
What you can usually do
- Pay bills and manage bank accounts the person already owns.
- Handle investments and speak with their financial advisor.
- File taxes and deal with the IRS on their behalf.
- Manage real estate they own, including selling it if the document allows.
- Apply for benefits like Medicaid or veterans' programs.
What you usually can't do
- Change their will or beneficiaries on accounts. A POA can't redirect an inheritance.
- Gift their money to yourself or others, unless the document specifically permits gifts.
- Act after death. The POA ends at death — at that point the executor takes over.
- Exceed the document's scope. If a power isn't listed, assume you don't have it.
Durable vs. springing
- Durable POA is effective the moment it's signed.
- Springing POA only activates when the person becomes incapacitated — which usually requires a doctor's letter, and can slow you down in an emergency.
Keep clean records
Every time you spend their money, keep the receipt and note why. Mixing their finances with yours — even briefly — is the fastest way to invite a challenge from other family members.
Keep these documents organized so the right person can reach them when it matters.
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