Detailed answer
Short version: Under Indiana law, a properly drafted financial power of attorney (POA) can give your agent broad authority to manage almost all of your financial affairs if you become unable to do so. Those powers can include handling bank accounts, paying bills, managing investments, buying and selling real estate, filing taxes, running a business, and accessing records — but some actions have special rules (for example, certain retirement-plan actions or real-estate recording requirements). You can also limit or expand authority in the document, name successor agents, and require accounting or other safeguards.
How a financial power of attorney works in Indiana
A financial POA is a written document that names an agent (sometimes called an attorney-in-fact) to act for you with respect to your property and financial matters. Indiana’s laws that govern powers of attorney are located in Title 30 of the Indiana Code; those provisions explain what form and language the document should contain, the duties of an agent, and when authority begins and ends. See Indiana Code Title 30: https://iga.in.gov/legislative/laws/2024/ic/titles/30.
Common powers a financial agent can be given
Unless you limit them in the POA, powers commonly granted to an agent include:
- Banking: open, close, and operate bank and other financial accounts; write checks; endorse and deposit checks; access safe-deposit boxes.
- Bill payment and household expenses: pay utilities, mortgage or rent, credit cards, medical bills, and other household expenses.
- Investments and brokerage accounts: buy, sell, trade, and manage stocks, bonds, mutual funds, and other securities; engage brokers and advisers.
- Real estate transactions: buy, sell, mortgage, lease, or manage real property. (Note: many counties require POA notarization and recording for real-estate transactions.)
- Business interests: operate, buy, sell, or close a business in which you have an ownership interest; sign business documents.
- Taxes: prepare, sign, and file federal and state tax returns and claim refunds; represent you before tax authorities.
- Claims and litigation: start, defend, or settle lawsuits and pursue claims on your behalf.
- Benefits and insurance: apply for, receive, and manage Social Security, VA, Medicare/Medicaid benefits, and private insurance proceeds subject to program rules.
- Gifts and transfers: make gifts or transfer assets to others if your POA includes an express gifting power and the agent follows any limitations you set.
- Trust-related acts: depending on how the document is drafted, an agent may be authorized to create, fund, or make changes to trusts—but courts and institutions may treat these acts carefully, so express language helps.
- Digital assets and records: access online accounts, pay for subscriptions, and manage digital property if the document addresses digital access.
Durability and when authority takes effect
You control when the agent’s authority starts. Common options are:
- Immediate (effective at signing): agent can act as soon as the document is executed, even if you are still competent.
- Springing (effective upon incapacity): agent’s authority begins only when you are determined to be incapacitated. Indiana recognizes durable language — include language saying the POA “remains effective notwithstanding subsequent disability or incapacity” to make authority continue after incapacity.
Because banks, brokers, and government agencies have different practices, many people choose immediate durable POAs (so an agent can act before incapacity and continue if incapacity occurs). Check with institutions where you hold assets to confirm their requirements.
Limits and common restrictions
Even a broad POA has limits:
- Healthcare decisions: financial POAs do not normally authorize medical treatment decisions. Use a separate health care advance directive for health-care authority.
- Wills and testamentary acts: an agent usually cannot create or revoke a principal’s will. Most states (including Indiana practice) treat testamentary actions as personal to the principal.
- Some retirement-plan transactions: retirement plan administrators may require separate beneficiary designations or trustee consents before an agent can withdraw or roll over funds.
- Institutional requirements: banks, title companies, and government agencies may demand notarization, specific wording, or an original document before accepting an agent’s actions.
Agent duties and protections
Under Indiana law and basic fiduciary principles, an agent must act in your best interests, avoid self-dealing, keep records, and account for actions when asked. The POA can spell out duties and require the agent to provide periodic statements or bond. If an agent abuses authority, the principal or others can seek court remedies.
Practical steps to make a POA work well in Indiana
To reduce disputes and ensure institutions accept the document:
- Use clear, durable language if you want the agent to continue acting after incapacity.
- Name successor agents in case the first agent is unavailable or unwilling.
- Specify powers you want to limit or expand (for example, restrict gifting, allow real-estate sales, or require bank oversight).
- Sign and notarize the POA; many banks and counties require notarization for financial acts and recording for real-estate transactions.
- Give copies to your agent, successor agents, family members, and relevant institutions (banks, brokerages). Institutions may ask for an original or a certified copy.
- Store the original in a safe but accessible place and tell your agent where it is kept.
When to talk to an attorney
Consider consulting a lawyer if you have unusual assets (closely held business, complex trust, or out-of-state property), want special protections (bonding, reporting requirements), or expect family conflict. A lawyer can draft or review language to match your goals and help ensure the document is accepted by financial institutions and county recording offices in Indiana.
Relevant Indiana law
Indiana’s statutory framework concerning powers of attorney and related fiduciary duties is located in Indiana Code, Title 30. For a general place to start, see the Indiana General Assembly’s Title 30 page: https://iga.in.gov/legislative/laws/2024/ic/titles/30. To find the specific provisions on powers of attorney, search the Indiana Code for “power of attorney” at the General Assembly site: https://iga.in.gov/search?query=power+of+attorney.
Helpful hints
- Pick an agent you trust: choose someone who will follow your wishes and communicate with family.
- Be specific: if you do not want unlimited gifting authority or business sale powers, say so in the document.
- Use durable language if you want the power to survive incapacity (include express “durable” or “not affected by later incapacity” wording).
- Notarize and sign properly: many institutions require a notarized POA and some real estate transfers require recording in the county recorder’s office.
- Ask institutions about their POA acceptance policies before relying on one. Some banks ask for their own forms or additional verification.
- Provide your agent with contact information for your financial institutions and a copy of the POA so they can act quickly when needed.
- Review and update your POA after major life events (marriage, divorce, move, change in assets, death of an agent).
Disclaimer: This article is informational only and does not constitute legal advice. It summarizes general principles of Indiana law but is not a substitute for advice from a licensed attorney who can evaluate your particular situation.