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Financial power of attorney: What it covers and how it differs from a healthcare POA
Written by: New York Life Editorial Team
Reviewed by: New York Life Compliance Team
Updated: October 29, 2026
You might think estate planning is just for what happens to your assets after you die. But it’s also important to name someone to handle your finances or make medical decisions for you if you’re alive but can’t do it yourself. A financial or healthcare power of attorney (POA) lets you legally appoint someone you trust to make those decisions on your behalf.
Key takeaways
- A financial power of attorney (POA) lets someone you trust handle your finances on your behalf.
- A healthcare POA authorizes someone to make medical decisions for you.
- Without the right POA documents, your loved ones could face delays, legal expenses, or even court involvement if you become incapacitated.
- A financial POA doesn’t replace other estate planning documents, such as a will, trust, or beneficiary designations.
- An estate planning attorney and financial professional can help you coordinate your POAs with your accounts, insurance, and broader financial plan.
What does a financial POA cover?
A financial POA is a legal document that gives someone you trust authority to handle certain money matters on your behalf. You’re called the principal, and the person you choose is your agent or attorney-in-fact.
Depending on how you write your financial POA, your agent may be able to do any of the following on your behalf:2
- Pay bills and manage bank accounts
- Buy, sell, or manage real estate
- Handle investments and retirement accounts
- File taxes and sign financial documents
- Pay insurance premiums and manage policies to help prevent coverage from lapsing
- Work with banks and other financial institutions
As you create your financial POA, you don’t have to give someone control over everything. You can grant broad authority or limit their responsibilities to specific tasks. You can also specify when their authority begins, subject to state law.
What is a durable financial POA?
Most financial POAs used in estate planning are durable, meaning they remain effective if you become incapacitated.1 This is an important distinction because a nondurable POA generally ends if you’re no longer able to make decisions for yourself.2
For example, you might give someone nondurable POA authority to handle a real estate transaction while you’re traveling. But if you’re seriously injured in an accident or develop dementia, you’d generally need a durable POA for that person to continue managing your finances.
Without a durable POA, your family could face delays accessing your accounts or paying bills. In some cases, they may need to ask a court to appoint someone to manage your finances. That could mean additional legal expenses, paperwork, and stress during an already difficult time.
What doesn’t a financial POA cover?
A financial POA doesn’t give someone authority to make medical decisions for you. It also doesn’t replace your will, trust, or beneficiary designations. And unlike those documents, a financial POA generally stops being effective when you die. From there, your executor or another legally authorized person takes over managing your estate.
What’s the difference between a financial and a healthcare POA?
A healthcare POA is there to make medical decisions on your behalf. This chart explains the differences:
|
Make financial and property decisions |
Make medical and healthcare decisions |
|
|
Yes, if authorized |
No |
|
|
Yes, if authorized |
No |
|
|
Yes, if authorized |
No |
|
|
No |
Yes, according to the document and applicable law |
|
|
Yes, if durable |
Yes |
|
|
Yes |
Yes |
Note: Depending on your state, a healthcare POA may also be called a healthcare proxy or medical POA.3
You can choose the same person for both your healthcare proxy and your financial POA, but you don’t have to. What matters is choosing someone you trust who can handle the decisions you’re asking them to make. Maybe that means your sibling is better at handling your money, but your spouse is better at understanding your medical wishes. You can set it up entirely how you wish.
Do you need both financial and medical POAs?
Naming both a financial and medical POA can make a difficult situation easier for your loved ones.
For example, suppose Maria, age 68, is hospitalized unexpectedly and can’t manage her affairs for six weeks. Her mortgage payment is due, along with the premium on a life insurance policy she’s had for years. Without a financial POA or another form of legal authority, her daughter may have trouble accessing Maria’s accounts to make those payments. A missed premium could even put her insurance coverage at risk of lapsing, depending on the policy’s grace period and other provisions.
Without a healthcare POA, medical decisions may fall to the people authorized under state law rather than the person Maria would have chosen. Having both documents in place can make it easier for someone she trusts to step in and keep things running.
How does a financial POA affect retirement accounts and investments?
A financial POA doesn’t automatically give your agent access to all your retirement and investment accounts. What your agent can do depends on how the document is written, state law, and your financial institution’s requirements.
Retirement accounts, including IRAs and 401(k)s, generally pass to your named beneficiaries when you die, not to whoever holds your financial POA. However, an agent may be able to change beneficiary designations if the document specifically allows it and state law permits.4 That’s why it’s important to keep your beneficiaries up to date and review what authority you’re giving your agent.
You’ll also need to pay attention to account titling. A jointly owned bank account may give another owner access to the money, but an account held in your name only may require POA authority or another form of legal authorization.
Will banks and financial institutions accept your POA?
Generally, banks should accept a valid POA, although the rules and exceptions vary by state. Some institutions may ask for additional documentation or prefer their own forms.⁵
To avoid headaches later, ask your bank, brokerage firm, retirement plan administrator, and insurance company about their requirements while you’re still able to address any issues.
Who should you name as your POA?
Your agent or power of attorney doesn’t necessarily need to be the person closest to you. However, they should be:
- Trustworthy and willing to put your interests first
- Organized and financially responsible
- Comfortable handling paperwork and deadlines
- Able to communicate with financial and legal professionals
- Willing to take on the responsibility
- Likely to be available when needed
Always talk to the person before naming them as your health or financial POA. You may also want to name a successor in case your first choice can’t or won’t serve.
When should you review your POA?
You’ll generally want to review your POA every year or whenever you experience one of these events:
- Marriage or divorce
- The death or incapacity of your named agent
- A major change in your relationship with your agent
- Moving to another state
- A major change in your finances
- Changes to your broader estate plan
A POA helps protect the financial plan you’re building
You can spend decades building your savings, investing for retirement, and protecting your family. But what happens if you’re suddenly unable to manage those finances yourself?
A financial POA is worth having in place before you need one, so your bills, investments, and other responsibilities don’t fall through the cracks if you’re unable to manage them.
Frequently asked questions
A financial POA lets someone you trust make financial decisions on your behalf. Depending on how it’s written, that could mean paying your bills, managing bank accounts and investments, filing taxes, or handling real estate transactions.
Ideally, you need a financial POA for money matters and a healthcare POA for medical decisions. Having both is a great gift for your loved ones so they can act quickly if the need arises.
If you become incapacitated without a financial POA, your loved ones may struggle to access accounts, pay bills, or manage your property. Depending on your state’s laws and how your assets are owned, they may need court approval to act on your behalf. That process can take time and add expenses and stress.
Being married doesn’t automatically give your spouse permission to manage everything in your name. Depending on the account or property, they may still need legal authorization to act on your behalf.
A financial POA generally ends when you die. You can also revoke it while you’re still mentally capable of doing so. Other circumstances, such as an expiration date written into the document, may also cause it to end.
Your agent may be able to manage investments, handle retirement account transactions, or take required minimum distributions. It all depends on the authority you’ve given them.
Related Articles
1Consumer Financial Protection Bureau. “Planning for diminished capacity and illness.” December 8, 2025.
2Consumer Financial Protection Bureau. “What is a power of attorney (POA)?” August 28, 2026.
3MedlinePlus. National Library of Medicine. “Health care agents.” January 14, 2026.
4Michigan Legislature. “Uniform Power of Attorney Act, Section 556.301.” 2023.
5Consumer Financial Protection Bureau. “My family member signed a power of attorney (POA) but when I took it to the bank/credit union, I was told the POA has to be on the bank/credit union's form. What can I do?” August 30, 2024.
Neither New York Life Insurance Company, nor its agents, provides tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.