Three Things to Check Before You Sign On as Someone's Power of Attorney

Jun 6

An email lands in your inbox. Your parent worked with their attorney on a power of attorney, and you've been named as their agent, the person they trust to help handle their finances if they're unable to. The instinct is to just sign.

But here's something most people don't realize: when you "sign on" as someone's power of attorney, you're typically not signing the power of attorney document itself, which your parent already signed. You're usually signing a separate acceptance, the form where you formally agree to take on the role of agent. Before you do, three questions are worth understanding. Not because something is likely to be wrong, but because accepting the role of agent is a real commitment, and knowing what you're agreeing to makes all the difference when the moment actually comes.

This is for general educational purposes only and does not constitute legal advice. Estate planning laws vary by state. Mitzi is not a law firm. Please consult a licensed attorney for guidance specific to your situation.

First: understand what you've actually received

This part surprises a lot of people. What lands in your inbox is often a notice that you've been named, or an acceptance form for you to sign, not the full document that grants the authority. The power of attorney is typically the document your parent signed; the acceptance is what you sign to step into the role. And being told you've been named is generally not enough on its own to actually use the power of attorney. Before reviewing anything else, it is worth confirming you have the complete document in hand and understanding what you're actually looking at.

Question one: who is the backup?

The document names you as the agent. But what happens if you're ever unable to serve? Most powers of attorney name a successor agent, the next person in line, for exactly this reason.

It is worth knowing who that person is. If no successor is named and something prevents you from serving, the document can stop working at the exact moment your family needs it most.

Question two: when does it start?

Not all powers of attorney work the same way. Some take effect the moment they're signed, meaning you could step in at any point if your parent asked you to or needed you to. Others are what's commonly called springing, meaning they "spring" into effect only when a specific future event happens. That triggering event is most often a determination that your parent can no longer make their own decisions, commonly confirmed by a licensed physician, or, less commonly, another event the document specifies, such as a particular date.

That distinction matters more than most people realize. Picture needing to pay your mom's bills the week she's in the hospital, and then learning that the document first requires a doctor's letter confirming she cannot manage her own finances. Understanding whether the document is immediate or springing, and what would need to happen for it to become active, is worth knowing before that moment arrives.

Question three: does it cover what you'll actually need to do?

A financial power of attorney is not automatically a blanket authorization for everything. Certain powers, such as handling taxes, selling real estate, making gifts on your parent's behalf, or managing digital accounts, often have to be specifically spelled out in the document. If a power is not included, it generally cannot be exercised.

It is worth reading through what the document does and does not authorize, and thinking through the kinds of things you might realistically need to handle. If something seems like it might be missing, the attorney who drafted the document is the right person to ask.

What to do with this information

None of this means something is wrong with the document your parent sent. Most of the time, an experienced estate planning attorney has covered these bases. What these questions give you is the understanding to confirm that, and to ask clearly if anything is unclear.

Asking questions before you sign on is not only reasonable, it is the right thing to do. Accepting the role of someone's power of attorney is a significant yes, and you are allowed to want to understand it first.

For more on how a financial power of attorney works and what it is designed to do, see The Three Essential Estate Planning Documents and our Glossary for plain-English definitions.

If this conversation made you think about your own documents, that is worth paying attention to. A financial power of attorney is something many adults benefit from having in place, not just aging parents. If you live in Michigan, Mitzi can guide you through creating your own today, at your own pace, with no law firm appointment needed to get started. Get started in the Mitzi app.

Not in Michigan yet? Join the waitlist and you will be the first to know when Mitzi comes to your state. Or take our Prepare to Plan Quiz for a free personalized checklist in the meantime.

Frequently Asked Questions

What does it mean to be named as someone's power of attorney? Being named as someone's power of attorney generally means you have been designated as their agent, the person they trust to help manage their financial affairs if they are unable to do so themselves. Being notified that you have been named is generally not the same as having the authority to act, and signing on as the agent typically means signing a separate acceptance form rather than the power of attorney document itself. You generally need the actual signed document in hand to use it.

What is a successor agent in a power of attorney? A successor agent is the backup person named in a power of attorney to step in if the primary agent is unable or unwilling to serve. If no successor is named and the primary agent cannot serve, the document may stop working when it is needed most. It is generally worth knowing who the successor agent is before a situation arises.

What is a springing power of attorney? A springing power of attorney is one that "springs" into effect only when a specific future event occurs, rather than as soon as it is signed. That triggering event is most often a determination that the person who created it can no longer make their own decisions, commonly confirmed by a licensed physician, or, less commonly, another event the document specifies, such as a particular date. This is different from an immediate power of attorney, which generally takes effect as soon as it is signed. Understanding which type a document is, and what the triggering event would be, matters for knowing when and how you can use it.

What powers are typically included in a financial power of attorney? The powers included in a financial power of attorney vary by document and by state. Common powers include managing bank accounts, paying bills, and handling investments. Certain powers, such as filing taxes, selling real estate, making gifts, or managing digital accounts, often have to be specifically listed in the document to be authorized. If a power is not explicitly included, it generally cannot be exercised.

Do I have to sign on if I am named as someone's power of attorney? Being named as someone's agent in a power of attorney is generally not binding until you accept the role, often by signing an acceptance form. If you have questions or concerns about the document, asking the attorney who drafted it before signing is a reasonable step. You are allowed to want to understand your responsibilities before agreeing to them.

Should I have my own financial power of attorney? A financial power of attorney is something many estate planning attorneys suggest considering for adults, not just aging parents. It names someone you trust to help manage your finances if you are ever unable to do so yourself. If you live in Michigan, Mitzi can guide you through creating your own financial power of attorney online, at your own pace. Get started at hellomitzi.com.

Katie Katz