Does a Financial Power of Attorney Expire?

Appointing a financial power of attorney can give you peace of mind that someone you trust will handle your assets when you are unavailable or incapacitated and unable to do so. But how long is a power of attorney in effect?

Does a Financial Power of Attorney Expire?

In many states, a durable financial power of attorney does not expire unless you revoke it or are no longer living. In other states, the law may include the following:

• You must specify a power of attorney expiration date
• If you do not state an expiration date, your power of attorney is only valid for a specific term (e.g., one year) from the effective date and will expire afterward
• You may be required to renew the power of attorney for it to remain valid
• A power of attorney may become invalid if your spouse is your agent and you get a divorce

Yearly meetings with your estate planning attorney will help you determine if the documentation meets your current needs and complies with changing state laws. Notify your attorney of life events—including moving to a new state—that can affect your documentation.

How Does a Financial Power of Attorney Work?

A financial power of attorney allows you to give someone you trust the legal authority to act for you if you are incapacitated or unavailable. You can give the person (known as your “agent” or “attorney-in-fact”) power over all or some of your finances. And you can specify the criteria for the power of attorney to go into effect.

Before you complete the documents, list which areas of your finances you want your agent to control and confirm that the person is willing to serve as your agent.

Examples of financial transactions:

• Buy and sell insurance policies or annuities
• Collect and manage your government benefits (e.g., Social Security or Medicare)
• File, manage, and pay your taxes
• Handle bank transactions
• Handle transactions for any property you own
• Invest your money in a bond, stocks, or mutual funds
• Maintain financial records
• Manage your retirement income
• Manage other sources of income
• Operate your small business
• Pay your everyday expenses

An estate planning attorney will help you determine if your documentation accounts for all your finances. When your power of attorney expires, you can keep the same agent or designate a new one. Or in advance of the expiration date, you can revoke the documentation and complete new forms.

What to Expect When Completing Power of Attorney Forms

Your estate planning attorney will review your financial power of attorney forms. State law where you live may have some or all the requirements below:

• Sign the form in front of two witnesses
• Sign the form in front of a notary public
• Submit a copy of the form to your state land records office
• Register the power of attorney form with the office of the register of deeds
• Additional requirements as defined by the state

Do You Need a Financial Power of Attorney?

Designating a financial power of attorney will protect your interests if you are absent or incapacitated. Some advantages include:

• Allow a trusted friend or relative to make financial decisions on your behalf
• Avoid court proceedings by a relative or companion to request authority
• Prevent a court from designating someone that you would not have chosen to act for you

To Whom Can You Give Power of Attorney?

You can give power of attorney to a trusted friend or relative who is not a minor or incapacitated. You can designate a second agent, or successor, if your primary agent becomes unavailable or unable to act when needed. As the American Bar Association states, integrity is often the most important trait of your agent.

Keep track of your power of attorney expiration date and ensure your agent has a copy of the documentation.

Get Help with Your Power of Attorney

Legal advice when completing power of attorney forms will ensure your documentation is comprehensive and legally valid.