Does a Financial Power of Attorney Grant Unlimited Power?

Can the person you name in a financial power of attorney do anything he or she wants to do? What an agent (POA) can do on your behalf depends on the language of your document and is also governed by legal duties and limitations imposed by Pennsylvania law. Pennsylvania law requires the person you choose to serve as POA to act in your best interest and within the scope of authority set forth in the POA document. 

A power of attorney can grant broad or narrow authority. For this reason, you need to be very careful about what powers you choose to include in your power of attorney document. If the powers are too broad, then the agent named in the POA may have authority to take actions you would not want him or her to take. If drafted too narrowly, your agent may not have enough power to take desired actions when needed. Here are some considerations to discuss with the lawyer drafting your financial power of attorney document:

Controls on Authority. You may wish to place limits on your agent. 

    1. Require Joint Action. Naming two agents and requiring two signatures may be the “check and balance” needed to avoid one agent making an ill-advised decision that could have been avoided if consultation with a co-agent had been mandated by the terms of the POA. 
    2. Require Joint Action Except as the Agents May Delegate. Sometimes requiring two signatures on everything can be tedious and unnecessary, such as for basic monthly bill paying. Your financial power of attorney document can give co-agents the ability to delegate tasks to each other. Your co-agents can then decide, for instance, to have only one of them sign checks to pay monthly bills, and perhaps the other agent could review the monthly bank statements. This way you have two people working together as your agents but avoid the logistical challenge of securing two signatures for routine monthly bill paying.  Also, some banks are not able to actively monitor the “two signature requirement” administratively and will not open bank accounts requiring two signatures for fear of liability. The administrators of some banks fear that if they were to allow checks that should have had two signatures to go through with one signature, they could be held financially responsible or have to pay to defend lawsuits. Some banks do open accounts that require two POA signatures, so you may need to shop for the right bank to work with if you prefer to see two signatures required.


You may wish to designate one person to serve as POA but want another family member or trusted third-party to be able to know what is going on with your finances. You can include language in your power of attorney that requires the person serving as your POA to provide copies of checks and bank statements to named family members and third parties. For example, you may name one child to serve as POA, but require in your POA document that this child provide copies of financial records to your other children upon request. 


You should always be very careful about who you designate to serve as your POA. A parent with several children may wish to give those children not serving as POA the legal authority to require the child acting as POA to file an account with the court. This situation normally only arises when there are concerns about the named agent acting improperly. Without such a provision the children who are not serving as POA may have a difficult time getting an explanation for how your funds are being spent or even lack the right to go to court to request an accounting.

Consider Limiting Hot Powers 

There are several powers that can be included in a financial power of attorney document that are sometimes referred to as “hot powers.” This is because you can be burned if your agent uses them inappropriately. These powers include gifting authority, the ability to create and change beneficiary designations, power to disclaim an inheritance, authority to create or sever forms of joint ownership, or the power to consent to a non-spouse to be primary beneficiary on a retirement account such as a 401(k). Whether or not to include these hot powers is a matter you should discuss with your lawyer. 

Gifting Authority

Do you wish to allow your agent to make unlimited gifts of your assets? Many of our clients do not. In some cases, our clients do wish to include unlimited gifting authority to permit future Medicaid planning or for other estate planning reasons. If the financial power of attorney document lacks this authority, certain asset transfers may not be permissible. Sometimes our clients wish to limit gifting to the annual gift tax exclusion amount which at the time of this writing is $16,000 per person per calendar year. Sometimes our clients wish to limit the purpose of gifts, or permit only very modest gifts for birthdays, anniversaries, weddings, or holidays where there has been a pattern and history of gifting. If you wish for your agent to be authorized to make any gifts, and especially gifts to himself or herself, this authority should be specifically stated in the document otherwise the gifting could be prohibited and considered a breach of fiduciary duty if gifting occurs. You may wish to require the prior written consent of a third party, such as your other then-living children, before any gifting occurs, especially “self-gifting.” Of course, you may also decide not to include any gifting authority in your power of attorney. When we draft a power of attorney that prohibits gifting, we specifically state that “No gifting is permitted hereunder.” 

Changing Your Estate Plan 

Do you want your agent to be able to change your estate plan? Sometimes flexibility is a good thing and granting an agent authority to adjust your estate plan can be helpful, but in other cases it can be extraordinarily damaging and could result in litigation and unfair outcomes. Ask your lawyer for the advice needed to make the informed decisions about what powers to omit or include in your document, particularly those powers which could disrupt your estate plan.  

Notice of Revocation 

If an agent is provided with notice that the power of attorney has been revoked, he or she must stop acting as power of attorney. You can revoke your power of attorney at any time unless you are incapacitated. If you are incapacitated, a person interested in your well-being can petition the court for guardianship and the court can remove an agent under power of attorney if the judge agrees there is good cause to do so. 

In summary, an agent under power of attorney is not permitted to do “anything” he or she wants to do with your property. Rather, your agent must act within the scope of the powers granted in the POA document, and must stop acting if you tell the agent you have revoked the power of attorney. 

Disclaimer: The above article is provided for general informational purposes only. Please do not rely on this article as a substitute for legal advice for your specific situation.

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