What Is a Power of Attorney?
A power of attorney is a legal document that lets someone you choose (your agent) act on your behalf, often for money and property. A durable power of attorney keeps working if you can no longer make decisions yourself. The forms and rules are set by each state.
What the law says
- A power of attorney is a legal document that allows someone else to act on your behalf. CFPB, What is a power of attorney (POA)?
- The person who signs the power of attorney is called the principal; the person given authority is the agent, also called an attorney-in-fact. CFPB, Managing Someone Else's Money: Help for agents under a power of attorney
- A financial power of attorney used to plan for future incapacity, such as dementia, is typically "durable," meaning it stays in effect if you become incapacitated. CFPB, What is a power of attorney (POA)?
- A power of attorney can also be used for short-term needs, such as paying bills or selling property while you are away or deployed. CFPB, What is a power of attorney (POA)?
- Without a power of attorney, a family member or friend may need to go to court to have a guardian appointed, which can be slow, costly, and public. CFPB, What is a power of attorney (POA)?
- A separate health care power of attorney names someone to make health care decisions; a financial power of attorney covers money and property. CFPB, Managing Someone Else's Money: Help for agents under a power of attorney
- You can still manage your own money after signing a power of attorney, as long as you are able to make decisions. CFPB, Managing Someone Else's Money: Help for agents under a power of attorney
- You can revoke an agent's authority at any time while you are still able to make decisions; you should tell the people and businesses the agent dealt with. CFPB, Managing Someone Else's Money: Help for agents under a power of attorney
- An agent's authority ends when the principal dies. It may also end on divorce or legal separation from a spouse-agent, or if a court appoints a guardian or conservator, depending on the document and state law. CFPB, Managing Someone Else's Money: Help for agents under a power of attorney
- An agent is a fiduciary with four basic duties: act only in the principal's best interest, manage money and property carefully, keep it separate from the agent's own, and keep good records. Consumer Financial Protection Bureau
- An agent who misuses authority can be removed, sued, or required to repay money, and may face criminal investigation. CFPB, Managing Someone Else's Money: Help for agents under a power of attorney
- State laws on powers of attorney vary; state law may require a business to accept a valid power of attorney. CFPB, Managing Someone Else's Money: Help for agents under a power of attorney
How to file a complaint
Use your state's power of attorney form or have a lawyer prepare one, since signing requirements are set by state law. If you suspect an agent is misusing a power of attorney, contact adult protective services, the police, or the sheriff; if money was taken with a power of attorney you never signed, contact your bank's fraud department and report it to local police. CFPB, Managing Someone Else's Money: Help for agents under a power of attorney
FAQ
Does a power of attorney let my agent make medical decisions?
Not unless it is a health care power of attorney. A financial power of attorney covers money and property; health care decisions use a separate document.
Can my agent still act after I die?
No. An agent's authority ends at the principal's death. After that, the estate is handled by an executor or personal representative.
Can I cancel a power of attorney?
Yes. You can revoke it at any time while you are still able to make decisions, and you should tell anyone the agent was dealing with.
What are the risks?
A power of attorney gives someone a great deal of authority over your finances without regular oversight. Choose someone you trust, tell family and advisers about it, and consider requiring regular reports to another person.
Related
- Do I Need a Lawyer to Make a Will?
- How Much Does a Probate Lawyer Cost?
- How to Make a Will
- What Is a Durable Power of Attorney?
- What Is a Living Trust?
- What Is a Medical Power of Attorney?
- What Is a Quitclaim Deed?
- What Is an Executor?
- What Is Probate?
- Will vs. Trust: What's the Difference?
- Wills, Estates & Deeds by state
General legal information, not legal advice. Laws change and local rules can differ; check the linked official source or talk to a lawyer about your situation.