What Authority Does a Power of Attorney Provide?
The authority granted under a Power of Attorney can vary considerably. The scope you choose should reflect the roles and responsibilities you would like your agent to handle on your behalf.
For some individuals, the primary goal is convenience—such as allowing a spouse or trusted person to sign documents, authorize money movement, or make routine account updates. For example, many forms and documents are now e-signature based, so if you are someone who struggles with technology, you could consider granting a responsible adult child the authority to e-sign/digitally sign certain documents on your behalf, and you can define the scope in which you’d like them to be able to act. In many cases, this can be addressed through a General Power of Attorney, as outlined by the National Council on Aging.
If you are currently in good health but would like to authorize an agent to help with paperwork and become familiar with your affairs in case circumstances change in the future, a Durable Power of Attorney may be appropriate. As explained by Cozza Law Group, this type of Power of Attorney remains in effect even if you later experience a change in capacity.
What is the difference between a General, Limited, Durable, and Springing Power of Attorney?
- General Power of Attorney
As the name suggests, this is the broadest form of Power of Attorney. It may authorize your agent to handle matters such as money movement, property or real estate transactions, and certain tax-related actions on your behalf. In general, it allows your agent to act in many situations that would otherwise require your signature. However, this type of Power of Attorney typically terminates if you become incapacitated, a distinction discussed by both the American Bar Association and Cozza Law Group.
- Limited Power of Attorney
Also known as a Special Power of Attorney, a Limited Power of Attorney authorizes your agent to perform only the specific duties identified in the document.
For example, if you are selling a vehicle while traveling abroad, you may grant someone Limited Power of Attorney to complete the sale and title transfer on your behalf. A Limited Power of Attorney can also be used for defined ongoing tasks, such as authorizing someone to update your address on a particular account. This type of arrangement is commonly described in state‑specific guidance, such as this overview from Lauter Law.
- Durable Power of Attorney
A Durable Power of Attorney can grant many of the same powers as a General Power of Attorney, but with one important distinction: it remains valid if you become physically or mentally incapacitated. In other words, your agent’s authority continues without interruption if your circumstances change. This durability feature is explained in detail by ElderLawAnswers and the American Bar Association.
- Springing Power of Attorney
A Springing Power of Attorney takes effect only after a specified triggering event occurs. This is often tied to a determination that you are no longer able to manage your own affairs. While it does not provide immediate authority to your agent, it can offer peace of mind that someone you trust will be able to step in when needed. The advantages and limitations of springing powers are discussed in resources such as ElderLawAnswers.
Regardless of the type of Power of Attorney in place, the authority granted ends immediately upon the death of the principal or account holder, as noted by the National Council on Aging.
Most Powers of Attorney apply to financial, legal, and property-related matters. A separate document for medical decision-making is commonly referred to as a Healthcare Proxy, which authorizes a designated individual to make healthcare decisions on your behalf if you are unable to do so yourself. This distinction between financial and medical decision‑making is emphasized by the American Bar Association.
What Is the Difference Between Custodian Power of Attorney Forms and Affidavit/Indemnification Forms?
*Many custodians, including Charles Schwab and Fidelity, offer their own proprietary Power of Attorney forms that can be applied at the individual account level, in the case that you do not have an existing Power of Attorney document, but would like to add an agent on your account(s).
With a custodian’s Power of Attorney, the agent’s authority applies only to the specific account(s) identified. You may be able to choose which powers to grant your agent, such as updating beneficiaries or modifying certain account privileges. Requirements and your agent’s parameters vary by state, but these forms usually must be signed by both the principal and the agent, with all signatures witnessed and notarized.
This may be a good option if you do not currently have a formal Power of Attorney document drafted by an attorney but would like to add an agent to your financial accounts.
Alternatively, you have the option to use an existing Power of Attorney document to add an agent to your account(s).
If you already have an existing Power of Attorney document and would like to activate it on your account(s), this document can typically be submitted to the custodian, in conjunction with their required Affidavit or Indemnification form. This is usually a shorter form that only requires the agent’s but not the account holder’s signature.
Keep in mind that if your existing document is a Springing Power of Attorney (explained above), the custodian will not be able to activate the Power of Attorney and add your agent to your account(s) until the specified “triggering event” occurs. As discussed in estate planning guidance from Lauter Law, the authority recognized will depend on the powers granted in the underlying document and the custodian’s review process.
If My Spouse or Trusted Contact Can Already View My Accounts, Does That Mean They Have Power of Attorney?
Not necessarily. In many cases, a spouse or trusted contact may have viewing or trading authority, which allows them to access account information when they log in. However, that does not automatically give them the broader legal authority of an attorney-in-fact. Without Power of Attorney, they generally cannot sign documents on your behalf, move funds in the same capacity, or make certain account changes for you. This distinction is commonly misunderstood and is highlighted in consumer education resources such as the National Council on Aging.
If you are unsure whether another individual on your account has Power of Attorney or only viewing authority, your Wealth Manager or Client Service Manager can help confirm how the account is currently structured and discuss options if you would like to add someone in either capacity.
Should I Have a Power of Attorney on My Accounts?
This is ultimately a personal decision, but as a general planning matter, many people choose to establish some form of Power of Attorney before it becomes urgently needed. Proactive planning can reduce stress, delays, and complexity during difficult situations, a point emphasized by both the American Bar Association and ElderLawAnswers.
If you have health concerns, a family history of cognitive decline, or simply want to plan proactively, putting these documents in place sooner rather than later can make a meaningful difference. We have seen situations where an unexpected event left loved ones facing significant stress, delay, and complexity at an already difficult time.
If you already have a Power of Attorney and would like to activate it on your accounts, or if you are considering designating an agent, please reach out to your Wealth Manager to discuss next steps and the options that best align with your needs.
Disclosures: This material is provided for informational and educational purposes only and should not be construed as legal, tax, investment, or financial planning advice. The information presented is general in nature and may not apply to your specific circumstances. A Power of Attorney is a legal document governed by state law. Laws and requirements vary by jurisdiction, and the appropriateness of any Power of Attorney arrangement depends on an individual’s unique circumstances. Readers should consult with a qualified attorney and other professional advisors regarding their specific legal, tax, and estate planning needs before taking any action. The examples provided are for illustrative purposes only and are not intended to represent any specific client situation or outcome. No assurance can be given that any planning strategy will be successful or appropriate for every individual. References to third-party organizations, custodians, legal resources, or educational materials are provided for informational purposes only. Howe & Rusling does not endorse, approve, or guarantee the accuracy or completeness of information provided by third parties and is not responsible for any content on external websites. Custodian policies, forms, procedures, and requirements may change without notice. Individuals should consult directly with their custodian and legal counsel regarding applicable documentation and account requirements. Howe & Rusling, Inc. is an SEC-registered investment adviser. Registration with the SEC does not imply a certain level of skill or training. Additional information about Howe & Rusling, including its Form ADV Part 2A, is available upon request or at www.adviserinfo.sec.gov.
