Financial Power of Attorney

Vermont law allows an agent to do some things, if you want, and prohibits other actions even if you would want the agent to be able to take them.  

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, including acting according to your instructions, those actions are legally binding as if you took the action yourself.

If you do not want your agent to have the power to do something, put those instructions in your Power of Attorney. Even if you did not put the instruction in your Power of Attorney, you can tell your agent not to do something or to stop doing something and they have to follow your instruction. If your agent does something you told them not to do, you can sue the agent for damages. You can also ask a court to void (undo) a transaction that the agent started in your name.

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 caregivers for you
• make housing decisions for you
• exercise your legal rights and conduct lawsuits

What can’t an agent do?

There are some things your agent cannot do unless you specifically say they can do them. These specific powers are:

• the power to convey (buy, sell, or give away) 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

There are some things your agent can never do:

• 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.

What about health care decisions?

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.

The agent has a “fiduciary” duty to protect your interests.

This means that the agent must:

• keep records and account to you how they spent your money (link to accountings section)
• follow any specific instructions from you, even if these are different from what you say in the Power of Attorney
• stop acting on your behalf if you revoke the Power of Attorney (link to revocation) or if you tell them specifically to stop doing something
• act in your interest, not the interest of the agent.

The agent must not:

• “commingle” (mix up) your money with the agent’s money
• benefit themselves at your expense
• have a conflict of interest with you as the principal
• act outside the authority you give them in the Power of Attorney.

It is important to know that an agent under a Power of Attorney has no general duty to act on your behalf. But if they have started working on a transaction for you — for example, if your agent starts an application for Medicaid on your behalf or starts to pay your rent while you are in the hospital — they have a duty to complete that transaction. An agent under a Power of Attorney is someone to help manage your financial affairs, but you still have a duty to manage your own affairs.

Can I ask for regular accountings?

You can have your agent give accountings about how your money is being spent. You can say how often you want an accounting, such as every six months. The accounting should list each business or person who got some of your money and how much they got. . You can have this information sent to you or to someone else. You can also ask your agent for an accounting at any time by writing to your agent. You can also write in your Power of Attorney that you want an accounting when some specific event occurs, such as the agent spending more than a certain amount of money on your behalf in a period of time.

A Power of Attorney must be in writing. It must name the person that you wish to act as your agent.

You can use this General Power of Attorney for Financial Affairs form or have a form drafted by a lawyer for you.

• Use the web page version of the Power of Attorney form.
• Download the fillable PDF version of the Power of Attorney form. 

As the principal, you must sign the Power of Attorney in the presence of at least one witness and a notary. Most banks and many Vermont town offices have a notary available to sign documents.

The Power of Attorney does not go into effect until the agent signs it. The agent’s signature does not need to be notarized. You can choose for the Power of Attorney to go into effect immediately when your agent signs, or you can choose for it to go into effect after a specific date, or when some future event occurs, such as when your doctor says you can’t make financial decisions for yourself without help.

How to make the Power of Attorney effective into the future

If you want the Power of Attorney to be effective even if you are incapacitated, you want a “durable Power of Attorney.” To do this, 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.

What to do with the document

What should you do with your completed Power of Attorney document? First, talk to the person you picked as your agent. Be sure that they understand what you want and how you want help. You should also let family members know about your Power of Attorney.

Make copies of the document. Keep one copy for yourself, give one copy to your agent, a copy to a family member or friend, and give a copy to any institution your agent is likely to do business with (like your bank). This will alert the bank or other institution that your agent can act on your behalf.

You can revoke (end) the 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, crossing it out, or any other act that shows you want it revoked.

To make things more clear, you can use this form to tell your agent that you are revoking the Power of Attorney.

• Use the web page version of the revocation form.
• Download the fillable PDF version of the revocation form. 

After you revoke your Power of Attorney, tell or give a copy of the form to each person you gave the Power of Attorney to originally. In particular, you should tell your bank and other financial institutions. Send them the form, as well.

You have the right to revoke a Power of Attorney even if your agent thinks you have become incompetent. You do not have to be mentally “competent” to revoke a Power of Attorney.

The Vermont Bar Association has written a booklet called Taking Charge: Plan Now for Future Financial Control.

If you have other questions about financial powers of attorney, fill out our form and we will call you back. Your information will be sent to Legal Services Vermont, which screens requests for help for both Vermont Legal Aid and Legal Services Vermont. You can also call us at 1-800-889-2047.