Disclaimer: This is general information, not legal advice. I am not a lawyer. For advice about your specific situation, consult a licensed Vermont attorney.
How a financial power of attorney works in Vermont
A financial power of attorney (POA) is a written document in which you (the principal) name another person (the agent or attorney-in-fact) to manage your financial affairs. In Vermont, a properly executed POA lets the agent act for you on money and property matters while you are competent and — if the document is durable — after you become incapacitated. Vermont follows the state statutory rules for powers of attorney. For Vermont statutes and resources, see the Vermont Legislature and Vermont Judiciary websites: legislature.vermont.gov/statutes/ and vermontjudiciary.org.
Typical powers a financial agent can exercise
A financial POA can grant broad or narrow authority depending on the language you choose. Common powers include the authority to:
- Access bank accounts, deposit and withdraw funds, write checks, and endorse checks made payable to you.
- Pay routine bills, taxes, mortgages, rent, and other ongoing expenses.
- Collect Social Security, pension, retirement, or other benefit payments and manage those benefit accounts.
- Buy, sell, lease, mortgage, or manage real estate and other property (if the POA specifically authorizes transactions involving real property).
- Manage investments: buy, sell, or trade stocks, bonds, mutual funds, and other securities; exercise voting rights in investments when authorized.
- Handle business interests, run, buy, or sell a business if the document grants those powers.
- File tax returns and represent you before tax authorities.
- Access and manage digital assets and online accounts where the POA and account terms allow.
- Hire and discharge attorneys, accountants, financial advisors, and other professionals to assist with your finances.
- Sign documents required to carry out any of the authorized financial transactions.
Common limits and special rules
Even if you give broad authority, some actions are commonly restricted or require explicit language:
- Wills and testamentary documents: An agent generally cannot make or change your will. That requires your signed testamentary act when you are competent.
- Gifts and transfers: An agent can make gifts on your behalf only if the POA specifically authorizes gift-making and provides any required limits (for example, annual amounts or beneficiaries). If you want your agent to make gifts to reduce estate taxes or to provide for family, name that authority explicitly.
- Lifetime transfers to the agent: Many institutions scrutinize or refuse transfers that benefit the agent directly unless the POA clearly authorizes self-dealing or gifts to the agent.
- Health care decisions: Financial POAs do not authorize health care decisions unless you also sign medical advance directives or a separate health care power of attorney.
- Institutional requirements: Banks, brokerage firms, and government agencies may require original signed and notarized POA forms or their own specific forms. Some require additional identification or internal review before accepting an agent’s authority.
Durable vs. non-durable and “springing” powers
Make sure your POA contains the language you intend:
- Durable POA: Says it remains effective if you become incapacitated (commonly includes a phrase such as “this power of attorney shall not be affected by my subsequent incapacity”). Without durability language, the POA may end if you lose capacity.
- Non-durable POA: Ends automatically if you become incapacitated.
- Springing POA: Takes effect only on a stated event (usually the principal’s incapacity). Many banks and third parties resist “springing” documents because they require proof of incapacity, like a doctor’s statement.
Agent duties and legal responsibilities
An agent must act in the principal’s best interests and follow any instructions in the POA. Typical duties include:
- Acting loyally and avoiding conflicts of interest.
- Keeping accurate records and accounting for transactions conducted for the principal.
- Acting within the authority the POA grants and not exceeding that authority.
- Following any specific standards or limitations you place in the document.
How to make a POA effective and how to revoke it
To be effective and readily accepted by banks and other institutions in Vermont, a POA should typically be:
- In writing and signed by you (the principal).
- Signed in the presence of a notary public and/or witnesses if the form or the accepting institution requires it.
- Clearly state whether it is durable and when it takes effect (immediately or upon incapacity).
You can revoke a POA at any time while you have capacity by:
- Signing a written revocation and delivering it to the agent and any third parties that have relied on the POA (banks, brokers, etc.).
- Executing a new POA that expressly revokes prior powers of attorney.
When you might need a guardian or conservator instead
If you become incapacitated without a valid POA in place, a court may appoint a guardian or conservator to manage your financial affairs. A court-appointed fiduciary has authority only as ordered by the court and appointment can be more time-consuming and costly than a voluntary POA.
Practical steps for Vermonters
- Decide what powers you want to give and whether the POA should be durable.
- Choose a trustworthy agent and at least one successor agent.
- Work with a Vermont attorney to draft or review the POA language to match your goals and to ensure it meets local acceptance standards.
- Sign the POA with the required notarization or witness rules, and give copies to your agent and financial institutions.
- Keep the original in a safe place and provide certified copies to banks or brokerage firms as needed.
Where to find Vermont law and forms
Vermont’s statutes and official resources are available from the Vermont Legislature and Vermont Judiciary websites. For statute text and related rules, start at: https://legislature.vermont.gov/statutes/. For probate and court procedures, see the Vermont Judiciary at https://www.vermontjudiciary.org/.
Helpful Hints
- Use clear, specific language for powers you care about (gifts, real estate, business transactions).
- Prefer durable POAs if you want the agent to act after incapacity; avoid vague “springing” conditions unless you also specify a reliable process to confirm incapacity.
- Choose an agent who will keep records, avoid conflicts of interest, and provide regular accountings if asked.
- Tell banks and benefit administrators ahead of time that your agent may present a POA and ask about their acceptance requirements.
- Consider having an attorney prepare or review the document to reduce the chance banks or other institutions refuse the POA for form or execution defects.
- Update or revoke the POA when major life events occur (marriage, divorce, death of agent, major changes in finances).
- Keep a copy of the POA and a signed revocation (if you revoke) and provide copies to anyone who needs to rely on it.
If you want help preparing a POA that will be accepted in Vermont or want to understand how particular institutions will treat your document, speak with a Vermont-licensed attorney experienced in elder law, estate planning, or probate matters.