Detailed Answer

Short answer: Under Minnesota law, a properly drafted financial power of attorney (POA) lets the agent handle most of the principal’s day-to-day and big-picture financial matters if the principal becomes unable to manage their finances. That authority can include paying bills, managing bank and investment accounts, buying or selling real estate, filing taxes, operating a business, and — if the document expressly allows it — making gifts or changing estate planning documents. The exact powers depend on the language used in the POA and any limits the principal adds.

How authority is created and made durable in Minnesota

Minnesota follows a statutory framework for powers of attorney. A principal grants authority by signing a written POA that identifies the agent and the powers given. To ensure the agent’s authority continues if the principal becomes incapacitated, the POA must include durable language (words saying the authority survives the principal’s disability) or follow the statutory durable-power rules. For the state statutes that govern powers of attorney, see Minnesota Statutes, chapter 523: https://www.revisor.mn.gov/statutes/cite/523.

Typical financial powers an agent can exercise

Most Minnesota POAs use an enumerated list of powers. Common financial powers include the authority to:

Access and manage bank accounts; deposit and withdraw funds; open and close accounts.
Pay routine household bills and long-term obligations such as mortgage payments.
Buy, sell, encumber, lease, or manage real estate owned by the principal.
Manage investments: buy, sell, and trade stocks, bonds, mutual funds, and other securities.
Handle business interests and operate a sole proprietorship or other closely held business.
Collect debts owed to the principal and settle claims or lawsuits on the principal’s behalf.
Make and revoke gifts or transfer assets, but only if the POA specifically grants gifting authority (see warnings below).
Make, amend, or revoke certain estate-planning documents (if expressly authorized), such as creating trusts or changing beneficiary designations.
File, sign, and amend federal and state tax returns and represent the principal before taxing authorities.
Access digital assets and accounts to the extent the POA grants that access.

Limits and special rules to watch for

Some acts that an agent might want to take require explicit authorization in the POA, or they are limited by statute or institution policies. Key limits include:

Gifting authority: Many states (including Minnesota) require the principal to specifically authorize an agent to make gifts or transfers for estate-planning purposes. If the principal does not give express gifting power, the agent generally cannot make large lifetime gifts or transfers to themselves or others beyond routine or customary gifts.
Transactions that affect the principal’s estate plan: Changing beneficiary designations, creating or terminating certain trusts, or renouncing rights under a will often requires clear, express authority.
Third-party acceptance: Banks, brokerages, title companies, and government agencies may require a notarized POA, a certified copy, or their own form before they accept an agent’s authority. They may also request an affidavit or proof of authority.
Agent duties and limits: An agent must act in the principal’s best interests, avoid conflicts of interest, keep accurate records, and follow any specific instructions or limitations in the POA. Those duties are set by statute and common fiduciary principles (see Minnesota Statutes, chapter 523: https://www.revisor.mn.gov/statutes/cite/523).

Practical examples (hypotheticals)

Example 1 — Routine finances: The POA names an agent and gives general authority over bank accounts and bill payment. If the principal develops dementia, the agent can pay utilities, withdraw funds to cover expenses, and manage routine deposits and withdrawals.

Example 2 — Real estate transaction: The principal’s POA expressly authorizes real property transactions. If the principal becomes incapacitated and needs to sell a home to pay for long-term care, the agent can execute the sale documents on the principal’s behalf.

Example 3 — Gift or estate changes: The POA does not mention gifting. The agent cannot make large lifetime gifts on the principal’s behalf or change beneficiary designations. If the principal wants those powers, they must expressly grant them in the POA.

How to make the POA work smoothly

To minimize problems later, follow these steps when creating a POA:

Choose an agent you trust and name one or more successor agents.
Decide whether the POA should be durable (survive incapacity) and use clear durable language.
Specify any special powers (gifts, trust creation, business operations) and any limits or instructions.
Sign the POA in the presence of any required witnesses and a notary public. Many banks and institutions require notarization.
Provide certified copies to institutions where the agent will act, and keep original documents in a secure but accessible place.

When a POA ends or is challenged

A POA ends when the principal revokes it, the principal dies, the principal regains capacity (if the POA was springing and triggered by incapacity), or a court invalidates it. If a third party refuses to accept the agent’s authority, ask the institution for written reasons, provide a certified POA copy, and consult an attorney if necessary. Courts can remove an agent who abuses authority or fails to act properly.

Where to find Minnesota law and forms

See Minnesota Statutes, chapter 523 for the statutory rules and duties that apply to agents and powers of attorney: https://www.revisor.mn.gov/statutes/cite/523. For specific drafting language or to make complex decisions (gifting, trust powers, business operations), consult an attorney licensed in Minnesota.

Disclaimer

This article is for general informational purposes only and does not constitute legal advice. It does not create an attorney-client relationship. For advice tailored to your situation, consult a licensed Minnesota attorney.

Helpful Hints

Discuss your wishes with the person you name as agent before signing anything.
Use clear, specific language if you want to grant or limit gifts, real estate sales, trust powers, or business control.
Notarize the POA and provide certified copies to banks, brokers, and other institutions where the agent will act.
Keep a short inventory of accounts and documents and a list of contacts (banks, brokerages, accountant, insurance agents) for the agent.
Review and update your POA after major life events (marriage, divorce, new children, change in finances, move to another state).
If a third party refuses to accept the agent’s authority, ask for written reasons and seek legal help promptly.
Consider working with a Minnesota attorney for complex matters — estate planning, family business transfers, or large gift authority.