Understanding What a Colorado Financial Power of Attorney Lets an Agent Do

Quick overview: A financial power of attorney (POA) lets the person you name (the agent or attorney-in-fact) act with your money and property when you allow them to. Under Colorado law, a properly drafted POA can give broad authority or only a few narrow powers. This article explains the common authorities, limits, activation rules, fiduciary duties, and practical steps to protect yourself and your assets. This is educational information only and not legal advice.

Detailed answer — what powers a Colorado financial POA typically grants

Colorado follows a modern statutory framework for powers of attorney. The Colorado Uniform Power of Attorney Act sets out how POAs work and how agents must act. See the Colorado Revised Statutes (Title 15, Article 14) for the governing provisions: Colorado Revised Statutes (Title 15). The specific section numbers for powers of attorney are commonly cited as C.R.S. § 15-14-501 et seq.

Most Colorado financial POAs give the agent some combination of the following authorities. Whether the agent actually has each power depends on the language of your POA document (what authority you checked or wrote in) and any limits you included.

Banking and cash management: Open and close accounts, sign checks, deposit and withdraw funds, endorse checks, and manage online banking (subject to the financial institution’s procedures).
Bill payment and household expenses: Pay utilities, rent or mortgage, insurance premiums, property taxes, and other regular expenses.
Real estate transactions: Buy, sell, refinance, lease, or manage real property on your behalf. (Many real estate transactions require a notarized or recorded POA.)
Investment and retirement account management: Buy and sell investments, manage brokerage accounts, and handle account transfers. Note: Some retirement plans and transfer agents have their own rules and may require additional forms.
Tax matters: Prepare, sign, and file tax returns; represent you before tax authorities.
Insurance and benefits: Manage insurance policies, collect benefits, and handle Social Security or veteran benefits paper where allowed (but an agent cannot sign a health care directive—health decisions are separate).
Business affairs: Operate or sell business interests, sign contracts, and manage payroll or vendor relationships if your POA explicitly authorizes those acts.
Gifts and transfers: Make gifts or transfers of your property to others — but most POAs must give explicit gift-making authority to allow broad gifting. If you want an agent to make gifts or transfer assets for estate planning, include clear language allowing it.
Trust and estate planning transactions: Create, modify, or revoke revocable trusts or transfer property into or out of trusts—only if the POA expressly authorizes those acts and state/plan rules allow it.
Litigation and claims: Begin or defend lawsuits on your behalf, pursue claims, or settle claims related to your finances when the POA grants that authority.

What agents generally cannot do

Make health care decisions (that requires a medical or health-care power of attorney or advance directive).
Sign a will for you or make testamentary changes unless specific state law permits an agent to perform very limited estate-related acts. Generally, an agent cannot create or sign your will.
Act after your death — a POA ends automatically at death; the executor or personal representative takes over.
Engage in acts that the POA document expressly forbids, or acts illegal under Colorado law.

Activation and durability — when the agent’s authority starts and how long it lasts

You control when the agent’s authority starts. Common choices:

Immediate (spring-free): The agent can act as soon as you sign the POA. This is useful for planning and convenience.
Springing (triggered by incapacity): The agent’s power begins only if you become incapacitated. If you choose this, the document should state the trigger clearly and describe who certifies incapacity (doctor, court, etc.). Many institutions resist springing POAs because they create extra hurdles to confirm incapacity.
Durability: If you want the POA to continue when you become incapacitated, the document must include durable language (for example, language stating the POA remains effective notwithstanding your later incapacity). Colorado recognizes durable POAs when they include that clear intent.

Agent duties and legal limits under Colorado law

When an agent acts under a Colorado financial POA, Colorado law imposes duties and standards:

Fiduciary duty: An agent must act in the principal’s best interest, avoid conflicts of interest, and follow any instructions in the POA.
Care and loyalty: The agent must act with prudence and loyalty and must not profit from their position unless the POA authorizes it or the principal consents in the document.
Record keeping: Keep records of transactions and be prepared to account for actions if the principal, family, or a court requests it.
Liability: Agents who breach their duties can face civil liability and restitution claims.

These duties and remedies are spelled out in the Colorado statutes and case law; see the Colorado Revised Statutes for the official provisions: https://leg.colorado.gov/colorado-revised-statutes.

Practical limits you should know

Financial institutions, brokerages, and government agencies may require an original POA, notarization, or a certified medical certification for a springing POA. Expect banks and title companies to ask extra questions.
Some actions (like transfers of real estate) often require recording the POA in the county records or meeting additional formalities.
Retirement plans, IRAs, and pay-on-death accounts often follow plan rules or beneficiary designations that a POA cannot override.
If the agent acts wrongly, family members can ask a court to remove the agent or appoint a conservator for your property.

Revocation and termination

You can revoke a POA at any time while you are legally competent by signing and delivering a written revocation to the agent and to third parties that rely on the POA. A POA also ends automatically if you die. If a court determines you are incompetent, the POA may remain effective depending on the language and circumstances, but a conservatorship appointment can change authority. For statutory guidance, consult the Colorado Revised Statutes: https://leg.colorado.gov/colorado-revised-statutes.

When you should consult an attorney

Consider legal help if you have complex assets (business ownership, out-of-state property, complex trusts, or tax issues), want special gifting powers, or wish to limit or condition an agent’s powers. A lawyer can draft clear, institution-friendly language and advise on interaction with retirement plans, real estate, and estate plans.

Helpful Hints

Choose a trustworthy agent and name at least one successor agent.
Be specific in the POA about powers you want to allow (gift-making, trust transactions, business operations).
Include durable language if you want the agent to act after you become incapacitated.
Have the document notarized and provide certified copies to banks, brokerages, and your agent.
Keep a list of accounts and important documents the agent may need, and store the original POA in an accessible but secure place.
Review beneficiary designations and retirement accounts regularly—POAs generally do not change named beneficiaries.
If you want an agent to manage real estate, ask about recording requirements in the county where the property sits.
Ask your agent to keep careful records and receipts for all transactions they perform for you.
If you have doubts about an agent’s actions, family members can seek court review or appoint a conservator.

Disclaimer: This article explains general principles of Colorado law and provides educational information only. It is not legal advice. For advice about your specific situation or to draft a power of attorney that meets your needs, consult a licensed Colorado attorney.