Detailed Answer
A financial power of attorney (POA) is a legal document in which you (the principal) name another person (the agent or attorney-in-fact) to handle financial, property, and economic matters on your behalf. Under Ohio law, a properly drafted POA can grant broad or narrow financial authority and can continue to operate if you later become incapacitated so long as it includes the appropriate durability language. For Ohio’s statutes governing powers of attorney, see the Ohio Revised Code, Chapter 1337: Ohio Rev. Code Chapter 1337.
Core powers an agent can receive
The agent’s actual authority depends on the wording you use. Common powers people grant in Ohio include the ability to:
- Access and manage bank accounts (deposit, withdraw, open, and close accounts).
- Pay bills and manage ongoing household expenses.
- Collect income, Social Security, pension, or other government benefits and manage benefits paperwork (note: some benefit programs have their own rules about third-party access).
- Prepare, sign, and file federal and state tax returns and handle tax matters.
- Buy, sell, mortgage, lease, or otherwise manage real estate and personal property.
- Manage investments, buy or sell stocks, bonds, and other financial instruments.
- Borrow money, refinance, and access credit on your behalf.
- Settle claims and make insurance decisions related to financial matters.
- Make gifts or transfers of property if your POA explicitly grants gifting authority (this is often limited because it can be abused).
- Deal with business interests, including signing business contracts and operating a business in many cases.
Durability and when the agent acts
Ohio recognizes POAs that are durable: if the document contains durability language saying it remains effective if you become disabled or incapacitated, the agent can continue to act after incapacity. If you do not include that language, the agent’s authority typically ends when you lose capacity. The document also can be limited to take effect immediately or to “spring” into effect only on a future condition (for example, a doctor’s determination of incapacity). Make the effective date and triggering conditions clear in the POA document.
Limits, prohibitions, and safety checks
A POA cannot give an agent power to do unlawful acts. An agent cannot act after your death (estate administration then follows probate rules). You can also expressly limit powers in the POA: for example, prohibit the agent from making gifts, from changing beneficiary designations, or from transferring property into their own name. Because agents hold significant control, Ohio law and common practice expect agents to act as fiduciaries with loyalty, care, and in your best interest.
Agent duties and potential liability
When you appoint an agent, Ohio law and equitable principles require the agent to act in your best interests, avoid conflicts, keep accurate records, and not engage in self-dealing unless the POA expressly allows it. If an agent misuses the power, they can face civil liability and sometimes criminal penalties depending on the conduct. For more on statutory rules about powers of attorney, see the Ohio Revised Code, Chapter 1337: https://codes.ohio.gov/ohio-revised-code/chapter/1337.
Third-party acceptance and practical hurdles
Although Ohio law permits third parties (banks, title companies, government agencies) to accept a valid POA, institutions sometimes hesitate and ask for certification, notarization, or specific language. To reduce refusals, use clear statutory or widely accepted language, sign in front of a notary, and consider providing a signed certificate of authority if the POA format allows one.
How to create, change, or revoke a POA in Ohio
Create a POA in writing. Most people have it signed before a notary and/or witnesses to avoid disputes and to satisfy the requirements of banks or title offices. You can revoke a POA at any time while you have capacity by executing a written revocation and notifying your agent and relevant third parties. A properly executed POA also should state its effective date and whether it remains effective after incapacity.
Practical example (hypothetical)
Imagine you appoint a trusted adult child as agent and include durable language so the POA continues if you become ill and lose capacity. You grant authority to pay bills, manage bank accounts, sell a property if required to pay for long-term care, and file tax returns. You expressly disallow the agent from making gifts to themselves and require annual accounting to another named family member. This structure gives the agent the necessary powers to manage finances but adds safeguards to limit misuse.
When to talk to an attorney
Consult an Ohio attorney if you have substantial assets, own a business, want complex gifting powers, anticipate contests, or if a bank or public benefits program imposes unusual requirements. An attorney can draft tailored language, explain tax consequences, and prepare backup documents such as HIPAA releases or directives for incapacity.
Disclaimer: This article explains general principles under Ohio law and is not legal advice. It does not create an attorney-client relationship. For decisions about your specific situation, consult a licensed Ohio attorney.
Helpful Hints
- Use explicit, clear language about when the POA takes effect (immediately or upon incapacity) and whether it is durable.
- Notarize the POA and consider having witnesses to reduce chances of third-party refusal.
- Limit gifting powers unless you have a specific reason to allow them, and consider adding oversight or accounting requirements.
- Give copies to your agent, financial institutions, and any co-agents or backup agents. Tell your primary bank and retirement plan administrator you have a POA and ask about their acceptance requirements.
- Keep a dated record of financial actions the agent takes and require periodic accountings if you want extra protection.
- Revoke old POAs in writing when you create a new one and notify institutions that have relied on the prior POA.
- For government benefits (Medicaid, Social Security), check program rules before granting authority to modify benefits or make gifts—some actions can affect eligibility.
- Pick an agent who is trustworthy, organized, and willing to keep clear records; name a successor agent in case the first agent cannot serve.
- Review your POA periodically and when family or financial circumstances change.