Detailed Answer

A financial power of attorney is a legal document that lets you appoint an agent (sometimes called an attorney-in-fact) to handle financial and property matters for you. In Massachusetts, a properly drafted financial POA can grant broad or narrow authority depending on the language you choose. A POA that contains durable language continues to operate if you later become incapacitated.

Core powers commonly granted

Unless you limit them, an agent with financial authority can typically do the following for you under Massachusetts law and common practice:

• Manage bank accounts: open, close, deposit to, withdraw from, and sign checks on checking and savings accounts.
• Pay bills and expenses: pay routine and extraordinary bills, mortgage or rent payments, and household expenses.
• Handle investments: buy, sell, transfer, and manage stocks, bonds, mutual funds, and retirement accounts (subject to plan rules).
• Collect benefits and income: collect Social Security, pension, annuity, rental income, or other payments and negotiate on your behalf.
• Manage real estate: buy, sell, mortgage, lease, or encumber real property (real estate transactions sometimes require the POA to be recorded in the county registry of deeds).
• File and handle taxes: prepare, sign, and file federal and state tax returns; represent you before tax agencies to the extent authorized.
• Open or close business interests: operate or wind down businesses you own, sign business documents, or manage business bank accounts.
• Hire professionals: employ lawyers, accountants, real estate agents, or financial advisers and pay for their services from your funds.

Common limitations and special rules

Even with broad language, some actions typically require explicit authorization or carry practical limits:

• Gifts and transfers: Power to make gifts or change beneficiary designations usually must be expressly authorized. If you want an agent to make gifts for tax or estate planning, include clear, specific language.
• Creating or changing your will: An agent generally cannot create, change, or revoke your will on your behalf.
• Health-care decisions: Those are controlled by a separate health care proxy or advance directive, not a financial POA.
• Transactions governed by third-party rules: Banks, retirement plans, and government agencies (e.g., Social Security or VA) may impose their own documentation requirements or refuse to accept a POA without specific language or certification.
• Authority ends at death: A POA terminates when the principal dies. The agent has no power to act on behalf of the deceased.

Durable language and incapacity

To ensure the agent’s authority continues if you become incapacitated, include durable language such as “This power of attorney shall not be affected by my subsequent disability or incapacity.” Without durable language, the POA may end if you lose capacity.

Agent duties and fiduciary obligations

Massachusetts law and general fiduciary principles require agents to act in your best interests. Typical duties include:

• Acting loyally and avoiding conflicts of interest.
• Keeping accurate records and providing accounting when requested.
• Not using your assets for the agent’s personal benefit unless the POA explicitly allows it.

Acceptance by third parties and practical steps

Third parties (banks, government agencies, title companies) sometimes refuse a POA that is not in their preferred form. Common practical steps to reduce rejection:

• Have the POA notarized and witnessed as required.
• Provide a certified copy of the document rather than the original in many cases.
• Record the POA at the county registry of deeds when it will be used for real estate transactions.

Where to find Massachusetts law and official guidance

Massachusetts provides consumer information and forms about powers of attorney. The state’s official resource on powers of attorney is available at Mass.gov: https://www.mass.gov/info-details/power-of-attorney. For the underlying Massachusetts General Laws and related statutes, consult the General Laws index: https://malegislature.gov/Laws/GeneralLaws. These resources explain required formalities, signature/witnessing rules, and other statutory details.

When to get legal help

Create or review a financial POA with an attorney when your finances are complex, when you plan to give broad powers (for example, gift authority), or when you expect challenges from banks or family members. An attorney can tailor clear language to match your goals and reduce the chance that a third party will refuse to accept the document.

Quick hypothetical example

Hypothetical facts: Anna owns a home, has investment accounts, receives Social Security, and wants her sister to manage finances if Anna becomes incapacitated. Anna signs a durable financial POA that names her sister as agent, explicitly authorizes: bank account management, bill payment, investment transactions, real estate sales, and gift-making up to $10,000 per year. With that language, Anna’s sister can sell the home if necessary, manage investments, and make modest gifts. If Anna had omitted wording authorizing real estate transactions or gifts, the sister could not legally perform those acts on Anna’s behalf.

Helpful Hints

• Use durable wording if you want the POA to operate after incapacity.
• Name successor agents in case the primary agent cannot serve.
• Decide and state whether the agent may make gifts and set specific limits if you allow them.
• Have the document notarized and follow any witness requirements to reduce third-party refusal.
• Record the POA at the registry of deeds when granting authority over real estate.
• Keep copies in a safe place and give certified copies to financial institutions likely to work with the agent.
• Require the agent to provide periodic accounting or receipts to help prevent disputes.
• Review and update your POA after major life events (marriage, divorce, new assets, relocation, or changes in relationships).