Power of Attorney (Financial)

A power of attorney (POA) is a legal document that allows you (the “principal”) to authorize another person (the “agent” or “attorney-in-fact”) to make financial decisions and handle financial transactions on your behalf. This template creates a durable financial power of attorney under the Minnesota Power of Attorney Act ( Minn. Stat. Chapter 523 ).

A “durable” power of attorney remains effective even if you become mentally incapacitated – this is the most common type used for planning purposes.

When to Use This Template

• Incapacity planning: You want someone you trust to manage your financial affairs if you become mentally incapacitated due to illness, injury, or age
• Convenience: You need someone to handle specific financial transactions on your behalf (such as managing your finances while you are traveling, deployed in the military, or recovering from surgery)
• Estate planning: You are creating a comprehensive estate plan and want to ensure your finances can be managed without the need for a court-appointed conservator
• Real estate transactions: You need someone to handle a property sale or purchase on your behalf

Types of Powers of Attorney

Durable Power of Attorney (This Template)

Remains effective even after you become incapacitated. This is the most common type for estate planning. It can take effect immediately upon signing or be “springing” (taking effect only upon your incapacity).

Non-Durable Power of Attorney

Automatically terminates if you become incapacitated. Useful for specific, limited transactions (such as authorizing someone to close on a real estate sale while you are out of the country).

Springing Power of Attorney

A type of durable POA that takes effect only upon the occurrence of a specified event, typically your incapacity as certified by one or more physicians.

How to Use This Template

1. Download the template in your preferred format (PDF or DOCX).
2. Fill in your (the principal’s) full legal name and address.
3. Name your agent. Choose the person you trust most to handle your finances. Include their full legal name, address, and phone number.
4. Name a successor agent. This is a backup person who will serve if your first-choice agent is unable or unwilling to serve. Include their full legal name, address, and phone number.
5. Select the powers you are granting. Review the list of powers and either:
   • Grant general authority over all financial matters, or
   • Limit authority to specific types of transactions
6. Choose when the POA takes effect:
   • Immediately upon signing (recommended for most situations), or
   • Upon your incapacity (“springing” POA – requires a method for determining incapacity, such as certification by one or two physicians)
7. Add any specific instructions or limitations. For example, you might limit the agent’s authority to sell real estate, or require the agent to provide periodic accountings to a named person.
8. Sign the document before a notary public. Minnesota law requires the principal’s signature to be notarized for the POA to be valid ( Minn. Stat. § 523.23 ).

Powers You Can Grant

Under Minnesota Statutes Chapter 523, you can grant your agent authority to handle:

• Banking and financial accounts – access accounts, make deposits and withdrawals, manage CDs and money market accounts
• Real estate – buy, sell, mortgage, lease, or manage real property
• Investments – buy, sell, and manage stocks, bonds, mutual funds, and other investments
• Insurance – manage insurance policies, file claims, change beneficiaries
• Retirement accounts – manage 401(k)s, IRAs, and other retirement accounts
• Taxes – prepare and file tax returns, represent you before the IRS and Minnesota Department of Revenue
• Business operations – manage business interests, vote shares, enter into business contracts
• Government benefits – apply for and manage Social Security, Medicare, Medicaid, and veterans benefits
• Gifts – make gifts on your behalf (if specifically authorized – this power must be expressly stated)
• Personal property – buy, sell, and manage personal property

Powers That Require Specific Authorization

Under Minnesota law ( Minn. Stat. § 523.23 and Minn. Stat. § 523.24 ), certain powers must be expressly stated in the POA to be effective:

• Making gifts
• Creating or changing rights of survivorship
• Creating or changing beneficiary designations
• Delegating authority to another agent
• Waiving the principal’s right to be a beneficiary of a joint and survivor annuity

Choosing Your Agent

Qualities of a Good Agent

• Someone you trust completely with your finances
• Someone who is organized and responsible with their own finances
• Someone who is available and willing to serve
• Someone who lives nearby or can travel to handle in-person transactions
• Someone who understands that they have a fiduciary duty to act in your best interest, not their own

Agent’s Duties Under Minnesota Law

Your agent has a fiduciary duty to you, which means they must ( Minn. Stat. § 523.21 ):

• Act in your best interest
• Act only within the scope of authority granted
• Keep your property separate from their own
• Keep records of all transactions
• Act in good faith
• Avoid conflicts of interest

An agent who violates these duties can be held personally liable for losses and may face criminal charges for theft or financial exploitation.

Revoking a Power of Attorney

You can revoke (cancel) a power of attorney at any time, as long as you are mentally competent. To revoke:

1. Create a written revocation stating that you revoke the power of attorney, signed and dated
2. Notarize the revocation
3. Deliver a copy of the revocation to your agent
4. Notify all institutions that received a copy of the original POA (banks, investment companies, etc.)
5. Record the revocation with the county recorder if the original POA was recorded

Recording the Power of Attorney

If the POA will be used for real estate transactions, it must be recorded with the county recorder’s office in the county where the property is located. Recording requirements:

• The original document must meet county recording format requirements
• Recording fees vary by county (typically $46 for the first page plus $2 per additional page)
• Some counties require specific formatting (margins, font size, etc.)
• Contact the county recorder’s office before recording to confirm requirements

Common Mistakes to Avoid

1. Not getting the document notarized. In Minnesota, a POA without notarization is not valid. This is the most common and most critical mistake.
2. Choosing the wrong agent. Do not choose someone simply because they are your oldest child or closest relative. Choose someone who is trustworthy, responsible, and willing to serve.
3. Not naming a successor agent. If your agent cannot serve (due to illness, death, or unwillingness), you need a backup. Without a successor, you may need a court-appointed conservator.
4. Granting overly broad powers without safeguards. Consider requiring your agent to provide periodic accountings to a trusted third party.
5. Confusing a POA with a health care directive. A financial POA does not cover medical decisions. You need a separate health care directive.
6. Not telling your agent where the document is stored. Your agent needs to be able to find the POA when it is needed.
7. Not updating the POA when circumstances change. If your agent moves away, becomes incapacitated, or you no longer trust them, create a new POA and revoke the old one.
8. Forgetting to record it for real estate. If your agent needs to handle real estate, the POA must be recorded with the county recorder.

Financial Exploitation Protection

Minnesota has strong laws protecting vulnerable adults from financial exploitation:

• Vulnerable Adults Act ( Minn. Stat. § 626.557 ): Financial exploitation of a vulnerable adult is a crime and can be reported to Adult Protective Services
• Financial institution protections: Banks and financial institutions in Minnesota may refuse to honor a POA if they suspect financial exploitation ( Minn. Stat. § 523.20 )
• Reporting: If you suspect someone is being financially exploited through a power of attorney, contact the Minnesota Adult Abuse Reporting Center at 1-844-880-1574

Related Resources

• Minnesota Judicial Branch - Guardianship and Conservatorship – what happens if there is no POA and someone becomes incapacitated
• Minnesota Secretary of State - Notary Public – find information about notary services
• Minnesota Board on Aging – resources for older Minnesotans
• Minnesota Attorney General - Elder Justice – protection from financial exploitation