Money & Debt

It is important to speak with your agent before giving them power of attorney to make sure that they are ready, willing, and able to make decisions if asked. A power of attorney (POA) for property is a form that lets you give someone else the ability to:

• Handle your money, and
• Make financial decisions for you.

A power of attorney for property makes sure that your financial decisions are handled properly if you can't handle them on your own. If you are too sick or injured to make these decisions, a power of attorney lets a person you trust make the decisions for you.

The person you give a power of attorney to is called your agent, and you are the principal. You can give your agent the right to make all of your money and property decisions, or only some of them.

You must create the power of attorney while you are still able to make decisions for yourself. You can't create a power of attorney after an injury or illness prevents you from making your own decisions. This means that you must be mentally competent to create a power of attorney.

Adult children of a parent with marginal or no capacity to make decisions for themselves cannot create a POA for their parent naming themselves as the agent. At that point, the potential principal rarely has the decision-making capacity to execute a POA.

If you give someone power of attorney, they are not legally required to use the powers you give them. They also don't have to take responsibility for your financial decisions. This is true no matter what your physical or mental condition is.

The agent you choose can decide not to act if they become sick or decide they do not wish to handle your finances. However, if your agent does act, they have to act in your best interest. They also must act according to the power of attorney for property.

No one else can handle your money unless they are one of the following:

• Legal guardian, or
• Your agent in a power of attorney.

What the agent can do

Your agent can handle your financial and property decisions. This might include the power to:

• Buy or sell real estate or other property,
• Control bank accounts,
• Pay bills,
• Contribute to or withdraw from a retirement plan,
• Deal with any insurance or annuity policy,
• Handle tax issues,
• Buy and sell stocks,
• Control safe deposit boxes,
• Hire a lawyer to file or defend lawsuits,
• Run a business,
• Borrow money and mortgage property,
• Handle an estate, or
• Manage Social Security, unemployment, and military benefits.

You decide what powers to give your agent when you create a power of attorney. You can also say what powers you don't want the agent to have. Often, a power of attorney sets a time that the power starts and when that power ends.

You can change your agent or change their rights by changing the power of attorney at any time. The only time you can't change a power of attorney is if you can no longer make decisions for yourself. You may revoke your power of attorney. There is also an option to delay the revocation for 30 days after you communicate your intent to revoke. This delayed revocation does not apply to the property POA. It only applies to the healthcare POA.

Note: A power of attorney for property is not a substitute for a will. A will tells the court what you want to do with your property after you die. A power of attorney for property only gives your agent the right to handle your finances during your life. The agent's power ends when you die. 

It is smart to have a lawyer prepare your power of attorney for a property if possible. This way, you can make sure that it includes all of the vital information about your financial situation. The lawyer can also help to make sure that both you and your agent fully understand the document.

If you are giving someone power of attorney for property, you may also want to look into Giving someone power of attorney for healthcare. Someone with power of attorney for healthcare can make healthcare decisions for you when you cannot make them for yourself.