Detailed Answer
A financial power of attorney (often called a POA) lets a person you name—the agent or attorney‑in‑fact—handle your financial and legal affairs if you cannot or choose not to do so. Under Washington law, the rules governing powers of attorney are in the Uniform Power of Attorney Act, chapter 11.125 RCW. See the full chapter here: RCW Chapter 11.125.
The scope of authority a financial POA grants depends on what you put in the document. A POA can be broad (a general financial POA) or narrow (limited to specific tasks). Typical powers you can give an agent include:
- Banking transactions: make deposits and withdrawals, write and endorse checks, open or close accounts.
- Real property transactions: buy, sell, mortgage, lease, or manage real estate (often requires the POA to be notarized and may need recording for some transactions).
- Personal property transactions: buy, sell, or manage vehicles, jewelry, and other personal items.
- Investment decisions: buy and sell stocks, bonds, mutual funds, and manage brokerage accounts.
- Business operations: continue, manage, or close a business you own (subject to business documents and law).
- Tax matters: prepare, sign, and file tax returns and handle audits.
- Government benefits and retirement plans: apply for or manage Social Security, Medicare/Medicaid interactions, and retirement accounts (note: some benefits have special rules; agents must follow program requirements).
- Claims and litigation: pursue or defend legal claims related to your finances.
- Gifts and transfers: make gifts or transfers on your behalf—but be careful: excessive gifting can create tax, Medicaid-eligibility, or abuse concerns and some institutions may refuse broad gifting authority.
- Estate transactions: create, amend, or manage certain non‑will estate documents; a POA cannot make or change your will in Washington.
Washington’s chapter gives wide latitude to list specific authorities or to use a general grant of authority. The exact wording you use controls what the agent can do. For the statutory framework, see the chapter here: RCW Chapter 11.125.
Durability and when the POA takes effect
Two important choices affect when and how the agent’s powers operate:
- Durable vs. non‑durable. A durable POA continues to operate if you become incapacitated. To create durability in Washington you must include language showing that the POA survives your later incapacity (for example, a clause stating it remains effective if you become disabled or incapacitated). See the chapter for statutory language and rules.
- Immediate vs. springing. An immediate POA takes effect as soon as you sign it. A springing POA becomes effective only upon a future condition, typically your incapacity. Springing POAs are allowed in Washington but can create practical problems because third parties often require proof of incapacity (a physician’s statement or court determination).
Limits, duties, and protections
Your agent must act in your best interest and follow any instructions you include. Washington law imposes fiduciary duties on agents. Agents generally cannot:
- Act beyond the authority you granted.
- Create or change your will.
- Use your assets for their personal benefit except as allowed in the POA or by your consent.
The statute also covers record keeping, agent liability, third‑party reliance on a POA, and how to revoke a POA. For specifics about agent duties and third‑party acceptance, review the chapter at: RCW Chapter 11.125.
Practical examples (hypothetical)
Example 1: If you give broad authority and name a durable agent, that person could pay your mortgage and property taxes, manage rental income, move money between bank accounts, and sell a vehicle while you are incapacitated.
Example 2: If you sign a limited POA that only authorizes “banking transactions,” the agent could access accounts and pay bills but could not sell your home or change beneficiaries on retirement accounts.
How to make the POA effective and reliable
To reduce disputes and ensure institutions accept the POA:
- Put the authority in clear, specific language and state whether it is durable.
- Have the principal sign in the presence of a notary public (many banks and title companies require notarization; real estate transactions often require recording).
- Consider adding successor agents to act if your first choice cannot.
- Keep copies and give copies to banks, advisors, and your agent. Some third parties will still ask for their own forms.
When a POA ends
A POA ends when the principal revokes it while competent, when a specified termination event occurs, when the purpose is fulfilled, or upon the principal’s death. A durable POA survives incapacity but not death. After death, the executor or personal representative handles the estate.
Important statutory reference: The Uniform Power of Attorney Act governs creation, scope, duties, and termination. The statute is available here: RCW Chapter 11.125.
Disclaimer: This article explains general principles of Washington law and is for educational purposes only. It is not legal advice. For advice tailored to your situation, consult a licensed Washington attorney.
Helpful Hints
- Choose an agent you trust, who understands finances, and who will follow your wishes.
- Consider naming at least one successor agent.
- Be specific about powers you do and do not want to grant (e.g., gifting limits, ability to sell your house, business authority).
- Make the POA durable if you want it to continue after incapacity; include clear durability language.
- Notarize the POA. Many banks and title companies require a notarized document; real estate may require recording.
- Inform banks, brokerage firms, and benefit administrators in advance; learn their acceptance policies and required forms.
- Keep a dated inventory of accounts and assets and give a copy of the POA to your agent and trusted family members.
- Review and update the POA if your circumstances or relationships change.
- For complex estates, business interests, or tax issues, seek legal and financial advice when drafting the POA.
- If you suspect abuse or unauthorized use by an agent, contact an attorney and local adult protective services; Washington law provides remedies for misuse under RCW Chapter 11.125.