Virginia: Financial Power of Attorney — What Powers Your Agent May Have

Detailed Answer

Under Virginia law, a properly executed financial power of attorney (POA) gives the named agent authority to act on the principal’s behalf in a wide range of financial matters. The Virginia Uniform Power of Attorney Act governs creation, scope, duties, and termination. See the Virginia Code, Title 64.2, Chapter 16 for the full text: https://law.lis.virginia.gov/vacode/title64.2/chapter16/.

Broad scope of the agent’s authority

Unless the document limits the agent, a financial POA can grant authority to do things such as:

• Access and manage bank accounts, deposit and withdraw funds, and endorse checks.
• Pay routine bills, rent or mortgage payments, and household expenses.
• Collect benefits and manage interactions with Social Security, VA benefits, Medicare, or other government programs.
• Buy, sell, lease, or manage real estate and other personal property.
• Manage investments, open or close brokerage accounts, and make investment decisions.
• Handle tax matters, prepare and sign tax returns, and communicate with the IRS and state tax authorities.
• Operate, buy, or sell business interests if the POA expressly authorizes business transactions.
• Obtain insurance, settle claims, and manage retirement accounts to the extent authorized.
• Create, modify, or revoke trusts only if the POA expressly grants that power.
• Make gifts only when the POA includes specific gift-making authority and any limits or standards for gifts.

Common specific powers often included

• Banking transactions (deposits, withdrawals, transfers, stop payments).
• Real property transactions (signing deeds, listing property for sale).
• Claiming benefits and managing government payments.
• Filing and signing tax returns and dealing with audits.
• Hiring attorneys, accountants, and other professionals on the principal’s behalf.
• Accessing digital financial accounts when the POA includes digital asset language.

Limitations and important rules in Virginia

• Durability: A POA is durable and continues during the principal’s incapacity only if it contains language saying it remains effective despite incapacity. The Uniform Act sets rules for durability and interpretation; see Virginia Code, Title 64.2, Chapter 16: https://law.lis.virginia.gov/vacode/title64.2/chapter16/.
• Gifts and estate planning powers are not automatic. If you want an agent to make gifts or to create or revoke a trust, the POA must specifically authorize those acts and should set any limits.
• Health care decisions usually require a separate health care power of attorney or advance directive. A financial POA does not substitute for a health care POA.
• Criminal acts, self-dealing, or actions that breach the agent’s fiduciary duties are illegal and unenforceable. The agent must act in the principal’s best interests.
• Third-party acceptance: Banks and other institutions may request the original document, notarization, identification, or additional proof before accepting a POA. If an institution refuses, the principal or agent can seek court help.

Agent duties and accountability

Under Virginia law, an agent has fiduciary duties. Key responsibilities include:

• Act in good faith and in the principal’s best interest.
• Follow the principal’s reasonable instructions and the terms of the POA.
• Avoid conflicts of interest and refrain from self-dealing unless the POA expressly permits that conduct.
• Keep accurate records and provide an accounting if requested or required.
• Keep the principal’s property separate from the agent’s own property.

When authority starts and stops

• Effective on signing: Many POAs become effective as soon as the principal signs them. The document will say so if that is intended.
• Springing (effective upon incapacity): A POA can “spring” into effect only when the principal becomes incapacitated, but the document should state how incapacity is determined (for example, a physician’s statement). Springing powers can create delay and practical complications.
• Termination: A POA ends when the principal dies, when the principal revokes it while competent, when the POA’s stated expiration occurs, or when a court appoints a conservator or guardian with exclusive authority.

Practical example

Hypothetical: An older adult signs a durable financial POA naming a trusted child as agent and checks items granting authority over banking, real estate, and tax returns but not gift-making. After the principal develops dementia, the agent uses the POA to pay bills, collect Social Security, sell a vacant piece of property to pay for home modifications, and file tax returns. Because the POA did not permit gifts, the agent avoids transferring cash to family members. The agent keeps detailed bank statements and receipts and is prepared to show them to the principal or a court.

Helpful Hints

• Decide whether you want a durable POA (continues during incapacity) or a non-durable POA (ends at incapacity). Durable POAs are common for long-term planning.
• Pick an agent you trust who can handle money, keep records, and communicate with professionals.
• Be explicit in the document about powers you want to include or exclude (gifts, trust powers, business transactions).
• Include successor agents in case the first agent cannot serve.
• Have the POA signed and notarized. Notarization or witnesses makes institutions more likely to accept the document.
• Provide copies to banks, investment firms, and the agent. Keep the original in a safe, accessible place.
• Review and update the POA after major life events (marriage, divorce, moves, changes in finances or relationships).
• If a third party refuses to accept a valid POA, consider asking the institution for a written reason and consult an attorney about next steps, including court intervention.
• Keep records: the agent should save receipts and create periodic accountings to avoid disputes.
• When in doubt, get legal help. A lawyer can tailor the document to your needs and ensure it meets Virginia technical requirements.

Disclaimer: This information summarizes general rules under Virginia law and is for educational purposes only. It does not constitute legal advice. For advice about your specific situation, consult a licensed Virginia attorney.