Financial Power of Attorney

A financial power of attorney lets you choose the person (called your agent) who will manage your finances if you are ever alive but unable to manage them yourself—without needing court involvement and without relying on the state’s default priority rules. It is a good idea to name a primary agent and at least one backup, just in case the primary agent is not available or willing to step in when needed.

You get to decide how much authority to give the agent. It can be as limited or as broad as you would like. A limited financial power of attorney permits the agent to carry out only certain transactions (such as signing a deed at a real estate closing). A general financial power of attorney means that the agent can do almost anything you can do.

You also get to decide when your agent can step in. One option is to make the power of attorney effective right away even if you are not incapacitated. That does not mean that you are giving up control; it just means that someone else can help out if needed. For example, maybe you are traveling, deployed with the military, or dealing with mobility issues that make it hard to handle things in person. Having someone you trust who can step in can make life a lot easier.

Another option is to create a springing power of attorney, which takes effect only if you become incapacitated. You can define exactly how that determination is made, but just a heads up—not all states allow springing powers of attorney, so it is something to check before deciding.

Finally, to make sure your agent’s authority continues even if you become incapacitated, you will want to make the power of attorney durable. This means that your financial power of attorney will still be enforceable even if you are incapacitated.