Most people understand that they should have a power of attorney.
Fewer people know who to name.
That is the real decision. The document matters, but the agent matters more. Your agent may need to pay bills, manage accounts, handle taxes, deal with insurance companies, sign paperwork, or protect your property if you cannot act for yourself.
Choose the wrong person, and you can create delays, conflict, or financial risk.
Choose the right person, name a backup, and keep the document current. The process becomes much simpler.
Start With One Question
Who would handle my money carefully if I could not do it myself?
Do not choose someone only because they are your oldest child, closest relative, or nearby neighbor. Choose the person who is most likely to:
- Follow your instructions
- Keep good records
- Communicate clearly
- Avoid unnecessary spending
- Deal calmly with banks, insurers, and government agencies
- Make decisions for your benefit, not their own
- Act quickly during an emergency
Your agent does not need to be a lawyer or financial professional. Your agent does need to be responsible and trustworthy.
For many people, the right choice is a spouse, adult child, sibling, or close friend. For more complicated situations, a professional fiduciary, accountant, or trust company may be worth considering.
What Makes a Good Agent?
A good financial agent is practical.
They do not need to know every detail of your finances today. They need to be willing to learn and able to manage your affairs without making the situation about themselves.
Look for someone who:
- Pays their own bills on time
- Can keep financial information private
- Will provide an accounting if asked
- Understands your family dynamics
- Can say no to relatives who request money
- Lives close enough, or is organized enough, to act when needed
- Has enough time to take on the responsibility
Your agent may need to contact your bank, manage a mortgage, renew insurance, sell a vehicle, deal with tax filings, or coordinate with a care facility. This is administrative work. It can become demanding quickly.
Ask the person before naming them.
A simple conversation is enough:
“I am creating a durable financial power of attorney. Would you be willing to manage my finances if I could not do so?”
Explain what the job might involve. Make sure they understand that they can decline.
Who Should You Avoid?
Some people should not be your agent, even if they are family.
Do not name someone in serious financial trouble
Avoid anyone dealing with:
- Bankruptcy
- Major unpaid debts
- Gambling problems
- Substance abuse
- Repeated financial emergencies
- A history of misusing other people’s money
- Pressure from creditors or lawsuits
Your agent may have access to your bank accounts and financial records. Their problems can become your problems.
Do not name a co-owner of the accounts you want protected
Do not name someone who is already a co-owner of your bank accounts, investment accounts, or other property you want managed under the power of attorney.
A joint owner may already have authority to access or withdraw funds. Adding a power of attorney on top of that can blur the difference between your money and their money. It can also make recordkeeping, family oversight, and later disputes more difficult.
A co-owner may be appropriate for a separate account or property arrangement. But they should not automatically be your agent for everything else.
Be careful with someone who benefits directly
A family member who will inherit from you is not automatically a bad choice. Many people appropriately name an adult child who is also a beneficiary.
The risk increases when the person:
- Controls decisions about their own inheritance
- Has a disagreement with other beneficiaries
- Wants to sell your property for personal reasons
- Pressures you to make gifts
- Refuses to share records
If you name a beneficiary as agent, keep the instructions clear. Consider naming a backup who can provide accountability.
Name a Backup Agent
This is the step people skip.
It is also the step that often breaks the plan.
Your first-choice agent may be unavailable because they:
- Die before you
- Become ill
- Move away
- Decline the appointment
- Have their own personal emergency
- Become unable to manage financial matters
If you name only one agent, your family may need to return to court when that person cannot serve. That can mean delays, legal fees, and court involvement at the exact time your family needs a simple solution.
Name at least one successor agent. In some situations, naming a second backup makes sense.
Use the same standards for the backup:
- Trustworthy
- Organized
- Financially stable
- Willing to serve
- Able to communicate with your family
Do not name two people together just to avoid choosing. Co-agents may need to agree on every decision. That can slow down urgent matters and create disagreements.
In many cases, one primary agent and one successor agent is the cleanest structure.
Can Your Agent Pay Themselves?
Usually, your agent can be reimbursed for reasonable expenses. That may include:
- Mileage
- Postage
- Filing fees
- Professional services
- Travel related to managing your affairs
Whether your agent can receive additional compensation depends on the document and the law that applies to it.
If you want your agent to serve without payment, say so clearly. If you want to allow payment, describe the arrangement. You might authorize reasonable compensation, an hourly rate, or a specific amount.
Do not leave this unclear if you expect family members to disagree.
Your agent should also keep receipts and records. Compensation and reimbursement should be transparent. Your agent should never treat your account as their personal checking account.
Financial POA vs. Medical Directive
These are different documents.
A durable financial power of attorney covers money and property. It can authorize your agent to:
- Access bank accounts
- Pay bills
- Manage investments
- Handle taxes
- Manage real estate
- Deal with insurance
- Apply for benefits
- Operate a business
- Manage vehicles and other property
An advance medical directive covers health care decisions. It allows you to name someone to communicate with doctors and make health care decisions when you cannot make or communicate those decisions yourself.
It may also state your treatment preferences.
A HIPAA authorization is related, but separate. It allows designated people to receive protected medical information. Without access to your records, even a health care agent may have difficulty understanding your condition or communicating with providers.
A financial agent cannot automatically make medical decisions. A medical agent cannot automatically manage your bank account.
You need both.
For a plain-English explanation, see our guide to advance medical directives.
When Does the Power Start?
A power of attorney can be structured in two basic ways.
Effective immediately
The agent can act as soon as the document is signed and properly executed.
This can be useful if you want help now, expect to travel, or want your spouse or trusted family member to handle routine financial matters.
It also requires a high level of trust. The agent may have authority before you are incapacitated.
Springing
The power begins only after a stated event, usually your incapacity.
This may feel more comfortable because the agent does not have authority immediately. But it can create delays. Banks and other institutions may require proof that the triggering event occurred. Doctors may need to provide statements. The institution may review the document before allowing access.
A springing power of attorney can work, but it is not always the easiest option during an emergency.
The document should state clearly when the agent’s authority begins. Do not assume “durable” means “springing.” Durable means the authority continues after incapacity. It does not automatically determine when the power begins.
A POA Does Not Replace Your Will
A power of attorney only works while you are alive.
It ends when you die.
Your agent cannot use your financial power of attorney to distribute your property after death, change your beneficiaries, or manage your estate indefinitely. After death, your executor or personal representative takes over under your will and applicable state law. If you have a trust, the trustee may have authority over trust property.
That is why your estate plan may need:
- A will
- A durable financial power of attorney
- An advance medical directive
- HIPAA authorization
- A trust, when appropriate
Our solo will plan and solo trust plan both ask you to name a primary and backup financial agent and medical agent.
What Banks and DMVs Actually Require
A signed document is not always enough.
Banks, brokerages, title companies, insurance companies, and government agencies may ask for:
- The original or a certified copy
- Notarization
- Proof of identity
- An agent certification
- A legal opinion
- Their own internal form
- Clear authority for the specific transaction
State rules also differ.
In Virginia, a financial power of attorney is generally durable unless the document says otherwise. Virginia law also provides rules for institutions that receive an acknowledged power of attorney. You can review the Virginia Uniform Power of Attorney Act.
Maryland generally requires a statutory financial power of attorney to be signed, notarized, and witnessed by two adults. West Virginia generally requires a financial power of attorney to be signed and acknowledged before a notary.
For a vehicle transaction, a general power of attorney may not be the form the DMV wants. The agency may require a transaction-specific document:
- Virginia: VSA 70
- Maryland: VR-470, the Maryland limited power of attorney for vehicle transactions
- West Virginia: DMV-9-TR
Call the relevant agency before sending your agent. Ask what form, signatures, identification, and copies are required.
One separate estate-planning note
A power of attorney does not determine whether your estate qualifies as a small estate. As of 2026, Maryland’s small estate threshold is $50,000, or $100,000 for a surviving spouse. Virginia’s threshold is $75,000, with a $35,000 single-asset provision. These rules address estate administration after death, not your agent’s authority while you are alive.
The Low-Friction Way to Choose
Use this checklist:
- Pick one trusted primary agent.
- Ask them before naming them.
- Reject anyone in serious financial trouble.
- Do not use a co-owner of the accounts or property you want protected.
- Name a backup agent.
- Decide whether the power is immediate or springing.
- State whether compensation is allowed.
- Sign the document using your state’s requirements.
- Give your agent a copy.
- Ask your bank, broker, and DMV what they require.
At Estate Plan HQ, every plan we draft includes a durable financial power of attorney, an advance medical directive, and HIPAA authorization. Each plan is personally drafted and reviewed by a licensed attorney.
That is the goal of affordable estate planning: clear documents, the right people named, and fewer problems for your family later.
This article provides general information and is not legal advice. Power of attorney requirements vary by state and situation. If you own a business, have significant assets, have family conflict, or need special powers, speak with a power of attorney lawyer about your circumstances.