Detailed Answer — What authority can you grant your agent?

Under Tennessee law, a financial power of attorney (POA) lets you (the principal) name an agent to act on your behalf for financial and legal matters. The scope of an agent’s power depends on the language in the POA: you can give broad authority or limit it to specific tasks. Tennessee’s provisions on powers of attorney appear in the Tennessee Code; see Title 34, Chapter 6 for the state’s rules and definitions: Tenn. Code Ann., Title 34, Ch. 6.

Common powers people grant

• Banking and cash management — open, close or access checking and savings accounts; deposit and withdraw funds; endorse checks.
• Bill paying and budgeting — pay recurring expenses, taxes, and other bills using the principal’s funds.
• Investment and portfolio management — buy, sell, trade, and manage stocks, bonds, mutual funds and other investments.
• Real estate transactions — sell, buy, mortgage, lease, or manage real property owned by the principal (may require extra formalities for recording real-estate documents).
• Tax matters — prepare, sign, and file federal and state tax returns; receive tax information and deal with tax authorities.
• Business interests — manage, operate, buy or sell a business or business interests the principal owns.
• Benefit and insurance claims — apply for and manage government benefits (Social Security, VA benefits), health insurance, life insurance proceeds and long-term care benefits.
• Creditor relations and borrowing — negotiate with creditors, obtain loans, mortgage or pledge assets as security.
• Claims and litigation — start or defend lawsuits and settle claims on the principal’s behalf.
• Digital assets — access and control online accounts and digital property to the extent allowed by the document and applicable account terms.

Powers that usually require explicit language

Certain actions often demand specific, express authority in the document. If you want your agent to do any of these, the POA should say so clearly:

• Make large gifts from your assets to others (including gifts to the agent). Gifts often require express gifting language.
• Create, amend, or revoke a trust on your behalf.
• Change beneficiary designations or disclaim inheritances.
• Waive spousal rights or take actions that could transfer marital property.

Durable vs. non-durable; when the POA is effective

To have an agent continue acting after you become incapacitated, the POA must be durable. A durable power of attorney contains language saying it remains effective if you become disabled or incompetent. Tennessee follows the Uniform Power of Attorney framework for many issues; include clear durable language if you want the document to survive incapacity. You also choose whether the POA becomes effective immediately upon signing or only upon a later event (a “springing” POA). If you make it springing, define how incapacity is determined (for example, by one or two licensed physicians or other specified procedures).

Agent duties and legal limits

An agent owes duties to the principal under Tennessee law: act in the principal’s best interest, follow the principal’s instructions, avoid conflicts of interest, not commingle funds, keep records, and account for financial actions when requested. The state can step in if an agent abuses authority; courts may remove an agent, order restitution, and pursue other remedies. See Title 34, Chapter 6 for statutory duties and safeguards: Tenn. Code Ann., Title 34, Ch. 6.

Practical bank and institution issues

Even with a valid POA, banks, brokerages, and government agencies sometimes require their own forms, certified copies, or additional ID. For real estate transfers, a court-certified or notarized original may be required for recording. Keep originals accessible and give copies to the institutions that will need them.

Examples (hypotheticals)

Example 1 — Broad, durable POA: Anna signs a durable financial POA that authorizes her agent to manage banking, investments, taxes, and real estate. If Anna later develops dementia, her agent can pay bills, sell a house if needed, and manage investments without court-appointed conservatorship.

Example 2 — Limited POA with specific gifts allowed: Ben wants someone to handle his finances while he travels and to be able to gift small amounts to grandchildren. He creates a POA effective immediately that limits authority to banking and tax filing, and separately includes explicit language permitting gifts up to a stated annual amount.

When a court conservatorship or guardianship might still be needed

A valid POA can avoid the need for a court-appointed conservatorship. But if no effective POA exists, or if the agent cannot act or is suspected of wrongdoing, family members or institutions may petition Tennessee probate court for a conservatorship or guardianship under the probate rules.

Important disclaimer: This article is educational only and does not constitute legal advice. For legal advice tailored to your situation, consult a Tennessee-licensed attorney.

Helpful Hints — Practical guidance when creating or using a POA in Tennessee

• Use clear, specific language. If you want your agent to have a particular power (gifting, real estate sales, trust actions), state it explicitly.
• Make the POA durable if you want it to continue after incapacity. Include unambiguous durability language.
• Name successor agents in case your first choice cannot serve.
• Decide whether the POA takes effect immediately or only upon incapacity; if springing, define how incapacity is determined.
• Check Tennessee statute and institutional requirements: banks, brokerages and government agencies may ask for additional forms or notarized copies. See Tenn. Code Ann., Title 34, Ch. 6: https://www.capitol.tn.gov/legislation/current/title34/chapter6.html.
• Keep the original signed document in a safe place; give copies to your agent(s) and your attorney. Consider giving a copy to your primary bank with a letter of instruction.
• Talk with the person you name. Make sure they understand your values and where your important papers are kept.
• Consider a lawyer review for complex situations (large assets, business ownership, blended families or potential family disputes).
• Keep good records. Require your agent to keep receipts and records of major transactions to prevent disputes.
• Revocation: you can revoke a POA while you are competent. Tell institutions in writing and retrieve original copies.