New Mexico — What Powers Does a Financial Power of Attorney Give Your Agent?

Detailed answer — what authority an appointed agent can have

A financial power of attorney (POA) is a legal document in which one person (the principal) names another person (the agent or attorney-in-fact) to make financial and property decisions for the principal. Under New Mexico law, the scope of an agent’s authority depends primarily on two things: (1) the language the principal uses when creating the POA, and (2) whether the document is durable (continues if the principal becomes incapacitated).

Typical authorities that a properly drafted financial POA can grant include (when the document expressly authorizes each act):

• Banking and cash management: open, close, and access bank and deposit accounts; write and endorse checks; make deposits and withdrawals; handle electronic transfers and online banking access.
• Bill payment and household expenses: pay recurring bills, utilities, rent or mortgage, and other ordinary household expenses on the principal’s behalf.
• Investment and brokerage transactions: buy, sell, and manage stocks, bonds, mutual funds, and other investments; direct brokers and financial advisers; exercise voting rights attached to investments if authorized.
• Real estate transactions: sign deeds, mortgage and refinance documents, sell, lease, encumber, or manage real property owned by the principal if the POA specifically grants that power.
• Tax matters: prepare, sign, and file federal and state tax returns, receive tax information, pay taxes, and deal with tax authorities to the extent the POA grants authority. (For IRS representation, a separate Form 2848 may be required in many situations.) See IRS guidance: https://www.irs.gov/individuals/authorizing-an-individual-to-represent-you
• Business interests: operate, buy, sell, or dissolve business interests owned by the principal, if the POA includes those powers.
• Insurance and benefits: make insurance claims, pay premiums, and access policy benefits. For some government benefits (Social Security, VA benefits, Medicare), different procedures (e.g., appointing a representative payee) may be required — see Social Security on representative payees: https://www.ssa.gov/payee/
• Gifts and transfers: make gifts or transfers of the principal’s property, but only if the POA explicitly authorizes gifting. Many people restrict or carefully define gifting powers due to abuse risks and tax consequences.
• Creation or revocation of trusts: fund or change a revocable trust with the principal’s assets if the POA clearly permits it.

Important limits and rules under New Mexico law and common practice:

• Express authorization matters. An agent’s powers are limited to what the document grants. If you want an agent to sell real estate, make gifts, or change beneficiary designations, the POA should say so in plain terms.
• Durability. If a POA is “durable,” it continues even after the principal becomes incapacitated. If it is not durable, the agent’s authority ends when the principal loses capacity. To protect against incapacity, make the POA durable by including the required durable language (e.g., “This power of attorney shall not be affected by subsequent disability or incapacity of the principal”).
• Third-party acceptance. Banks, brokerages, title companies, and government agencies sometimes refuse to accept a POA that does not meet their internal rules. Using a commonly accepted statutory short form and having the document notarized generally reduces refusals.
• Fiduciary duties. An agent must act loyally and in the principal’s best interest, avoid conflicts of interest, keep records, and follow any instructions in the POA. New Mexico law and the Uniform Power of Attorney principles require the agent to act in the principal’s best interest and to follow the principal’s reasonable instructions. For the state statutes and forms, consult the New Mexico statutory resources: https://www.nmlegis.gov/Legislation/Statutes_and_Codes
• Irreversible acts and limits. Some acts are sensitive or restricted. For example, changing beneficiary designations on retirement accounts or life insurance may be limited by account rules; gifting large sums or disinheriting persons may have tax, Medicaid, or family-law consequences. If you want these powers, include express, detailed authority and consult an attorney.
• Not a substitute for health decisions. A financial POA does not authorize medical treatment or health-care decisions. For health decisions, a health-care POA or advance directive is needed.
• Supervision and court oversight. If there is suspected abuse or if third parties refuse a POA, a court can appoint a guardian/conservator to manage finances. A court-appointed guardian has powers that supersede those of an agent named in a POA.

Statutory references and where to look in New Mexico

New Mexico follows statutory rules governing powers of attorney. The state’s statutes and any model forms or rules can be found through the New Mexico Legislature’s statutes and codes pages: https://www.nmlegis.gov/Legislation/Statutes_and_Codes. For practical court and self-help guidance, see New Mexico Courts’ self-help resources: https://www.nmcourts.gov/self-help/

Because wording and execution requirements affect whether third parties will accept a POA, people commonly use the state’s statutory language (when available) and have the document notarized and witnessed where required.

Helpful hints — make a POA that works when it’s needed

• Choose your agent carefully. Pick someone trustworthy, organized, and willing to keep careful records. Name a backup agent in case the first choice is unavailable.
• Specify powers clearly. List the specific financial powers you want the agent to have instead of relying on vague language. If you want gifting, real estate sales, or business authority, say so explicitly.
• Make it durable. If your goal is for the agent to act after incapacity, include clear durable language so banks and other institutions will accept it.
• Notarize and follow execution rules. Have the POA signed and notarized according to New Mexico’s execution practices. Notarization and proper witnessing decrease the chance that companies will refuse the document.
• Provide copies to key parties. Give copies to your agent, banks, financial advisors, and close family. Keep the original in a safe but accessible place.
• Talk to banks and firms ahead of time. Ask major banks, brokerages, and title companies what they require to accept a POA so you can include any needed language or forms.
• Keep records. An agent should keep receipts and a clear written account of all actions taken for the principal and be prepared to provide an accounting if asked.
• Limit gifts and transfers. If you worry about misuse, limit gifting powers and require that large or unusual transactions be approved by a co-agent or a court.
• Review and update. Revisit your POA whenever life changes (marriage, divorce, changes in finances, or a change in the person you’d choose as agent).
• Consider professional help. A trusted estate planning attorney can draft a POA tailored to New Mexico law, help avoid tax or Medicaid pitfalls, and coordinate POAs with wills and trusts.
• If a third party refuses to honor a POA. Ask for the reason in writing. If you cannot resolve the refusal, an attorney can help or you may need to seek court assistance.