Iowa: What Powers a Financial Power of Attorney Can Give Your Agent

Disclaimer: This information is educational only and is not legal advice. If you need legal advice about your situation, contact a qualified Iowa attorney.

Under Iowa law, a properly executed financial power of attorney (POA) gives the person you name (the agent or attorney‑in‑fact) authority to manage many of your financial affairs if you become unable to manage them yourself. Iowa has adopted a version of the Uniform Power of Attorney Act. See Iowa Code chapter 633B for the statutory framework and the agent’s powers and duties: Iowa Code chapter 633B.

Key points about what a financial POA can allow an agent to do:

• Bank and cash management: Open, close, and manage bank accounts; deposit and withdraw funds; endorse checks and negotiable instruments; reconcile and maintain accounts.
• Pay bills and manage routine expenses: Pay mortgage or rent, utilities, household bills, and other ongoing obligations.
• Investments and securities: Buy, sell, trade, and otherwise manage stocks, bonds, mutual funds, and other investments consistent with any instructions in the POA.
• Real estate transactions (if specifically authorized): Buy, sell, lease, mortgage, or encumber real property—usually only when the document expressly grants authority to convey or encumber real estate.
• Business interests: Operate, buy, sell, or dissolve business interests if the POA expressly authorizes those acts.
• Tax matters: Prepare, sign, and file tax returns, claim refunds, and communicate with tax authorities on your behalf when the POA gives tax authority.
• Benefits and insurance: Apply for, receive, and manage Social Security, retirement, pension, insurance, or other government and private benefits for you.
• Create and revoke certain interests if authorized: With explicit language, an agent can create or revoke trusts, make gifts, or change how assets are titled—these powers should be granted expressly because they involve major transfers.
• Legal actions: Initiate, defend, or settle legal claims on your behalf if the POA gives litigation authority.
• Digital assets and records: Access digital account information and electronic records if the document is drafted to provide such access and meets any applicable rules on authentication.

How the POA becomes effective and whether it continues during incapacity:

• Immediate vs. springing authority: A POA can be effective immediately when signed or can be a “springing” POA that becomes effective only when a specified event (for example, a doctor’s certification of incapacity) occurs. The document must state the trigger for effectiveness.
• Durability: To remain in effect if you become incapacitated, the POA must include durable language saying the authority continues despite your later incapacity. Under Iowa’s statute, durable wording preserves agent authority during incapacity if the document indicates that intent. See Iowa Code chapter 633B for the durability rules: Iowa Code chapter 633B.
• Ends at death: A financial POA always terminates at your death. After death, a personal representative or executor handles your estate.

Agent duties and limits under Iowa law:

• Fiduciary duty: The agent must act loyally and in your best interests. The law imposes a duty to avoid conflicts, not to commingle funds, and to follow your directions and the POA’s terms.
• Recordkeeping and accounting: Agents should keep accurate records of transactions and be prepared to account for their actions if asked by you, your family, or a court.
• Limits on authority: Some actions—like changing beneficiary designations on retirement plans, making large gifts, or creating irrevocable transfers—should be authorized explicitly in the POA. Financial institutions can also set their own requirements and may refuse to accept a POA that is unclear or not properly executed.
• No medical decision authority: A financial POA does not give an agent the right to make healthcare decisions unless a separate health care directive or combined document specifically grants that authority.

Typical formalities and practical requirements:

• Execution formalities: Iowa law requires that a power of attorney be signed by the principal and typically acknowledged before a notary public or witnessed consistent with the statutory form. Financial institutions often require a notarized original or the Iowa statutory short form.
• Financial institution acceptance: Banks, brokerages, and other institutions may request to see the original power of attorney, a certified copy, or a specific statutory form. Institutions sometimes add their own forms or require proof of the agent’s identity.
• Successor agents and contingencies: Name one or more successor agents in case your first choice cannot serve. Specify any restrictions or instructions you want the agent to follow.

Short hypothetical example

Suppose you sign a durable financial POA in Iowa that names a trusted friend as your agent and expressly authorizes managing your bank accounts, paying bills, and selling real estate. If you later become medically incapacitated, that agent can keep your mortgage current, transfer money between your accounts, sell a rental property if needed, and pay related expenses—so long as the POA’s wording grants those powers and you follow execution formalities. If the POA did not include authority to sell real estate or make large gifts, the agent could not legally do those acts without additional authorization or court approval.

When to consult an attorney

Because financial POAs can create major legal and financial changes, consider consulting an Iowa attorney if you need help drafting, limiting, or interpreting a POA. An attorney can tailor the document to your goals (for example, limiting gift authority, setting spending rules, or addressing business interests) and ensure it complies with Iowa execution rules. If a bank or brokerage refuses a POA, an attorney can help resolve the refusal or seek a court order if necessary.

Helpful Hints

• Choose a trustworthy agent and at least one successor agent.
• Be specific in the POA—spell out big powers (real estate, gifts, trusts, business sales) rather than relying on broad language.
• Include durable language if you want the POA to remain effective during incapacity.
• Have the document notarized and keep originals where banks and other institutions can access them; give copies to the agent and a trusted family member.
• Tell your bank, investment firm, or retirement plan about the POA in advance; some institutions provide a checklist or require their own acceptance form.
• Keep careful records of all transactions made by the agent and require periodic accounting if you are able to review it.
• Review and update your POA after major life events (marriage, divorce, birth, death of an agent, big changes in assets).
• Use a separate advance directive for health care decisions; a financial POA does not cover medical choices.

Relevant statute: Iowa Code chapter 633B (Uniform Power of Attorney Act) provides rules on authority, duties, execution, and termination. See: https://www.legis.iowa.gov/docs/code/633B.pdf.