Power of Attorney Record Keeping: What an Agent Should Track (US)

Check what it lets you do, when it starts, whether it names a co-agent or a successor agent, and what it says about gifts, paying you for your time and paying back your expenses. If something is unclear, ask a lawyer before you rely on it.

Banks, care homes and others will ask to see it. Some banks also ask you to fill in their own forms, so ask each one what it needs.

The CFPB sums them up as: act only in the person's best interest, manage their money and property carefully, keep their money and property separate from yours, and keep good records. Source: CFPB, Managing someone else's money.

Acting in their best interest includes respecting what they value and how they have always handled money. Involve them as much as they are able to be involved.

Bank accounts, pensions, Social Security, investments, insurance, rent or mortgage, utilities and care costs. This list is the starting point for your records.

Social Security does not accept a power of attorney for managing someone's benefits. If the person needs help with Social Security or SSI payments, Social Security can appoint a representative payee, who has separate rules. The VA has its own fiduciary program for VA benefits. Source: Social Security, Representative payee program.

Form 2848 is the IRS form used to authorize someone to represent a taxpayer before the IRS. Source: IRS, About Form 2848.

Do not move it into your own account, even for a short time. Mixed money makes your records hard to follow and can look like misuse, even when it is not.

For example: Mary Smith, by John Smith, agent under power of attorney. Ask each bank how it wants you to sign. Signing this way shows you are acting for the person.

If you ever have to pay something yourself, keep the receipt and write it down so you can be paid back later (see phase 4).

Pay by check, card or bank transfer, so every payment leaves a trail. If you must use cash, get a receipt and note what it was for.

Not even a small amount you mean to pay back. An agent generally must not borrow, lend or give away the person's money unless the document clearly allows it.

For example buying their car, renting their home yourself or hiring your own business. If something like this really is in their interest, get advice first and write down why.

For each entry write the date, the amount, who was paid or who paid in, what it was for, which account was used and where the receipt is. A notebook works; a spreadsheet adds up the totals for you. If that helps, we make a power of attorney record keeping spreadsheet.

Pensions, Social Security deposits, interest, dividends, rent, refunds and money from any sale.

Bills, care costs, shopping and transfers between the person's accounts. Small amounts add up, so log them too.

Keep invoices from care homes, home care agencies and doctors, pharmacy receipts, utility and phone bills, property tax and insurance bills, repair invoices, and receipts for anything you buy for the person. Note on each one the date it was paid and how.

Once a month, check each statement against your log and ask about anything you do not recognize.

For example selling a car, changing care or moving money between accounts. Note the date, what you decided, who you asked and why it was in the person's interest.

One folder or binder for paper, and a backup of any scans or files, in a place the family knows about. If you prefer paper, we make a printable power of attorney binder.

Many documents, and the law in many states, allow an agent to be paid back for reasonable expenses, and some allow reasonable pay. If the document says nothing, ask a lawyer before you pay yourself anything.

Receipts for things you bought for the person, parking, and a log of the miles you drove for their errands, with dates and reasons.

Use a check or bank transfer from the person's account, never cash, and list in your log which receipts it covers.

Write down the date, the hours and what you did. Put any agreed rate in writing and tell the family.

Being open early prevents most disagreements later.

This includes gifts to yourself, your children and other relatives. In many states an agent may make gifts only if the document says so expressly, and sometimes only up to a limit.

For example the birthday presents the person always gave. Write down the date, the amount, who received it and why it fits what the person would want.

Gifts and transfers can affect whether the person qualifies for Medicaid help with long-term care later. An elder law attorney can explain the rules in your state.

An agent cannot make a will for the person. Many states also require the document to say expressly that you may create or change a trust, a joint account or a beneficiary designation. Get legal advice first.

Be wary of new friends who ask for money, sudden requests and pressure to move money quickly. If you suspect financial exploitation, contact Adult Protective Services or the police. Source: CFPB, Managing someone else's money.

The starting balance, money in, money out, the closing balance and anything unusual. One page is enough. Keep a copy of each summary with your log.

Respect the person's privacy and wishes. If they can still say who should see their finances, ask them.

Forms W-2 and 1099, the SSA-1099 from Social Security, and receipts for medical costs. If the person has to file a tax return, it still has to be filed while you act for them.

In many states the person, a court, a guardian or certain others can ask an agent to show their records. Ask a lawyer what your state requires and by when.

For each account: the starting balance, every payment in and out with its receipt, and the closing balance, matching the bank statements.

Some courts have their own forms or rules for an accounting. Use those rather than your own layout.

A power of attorney ends when the person dies. From then on the executor or administrator deals with their money. Give them your records and a final summary. Our executor checklist covers what happens next.

Follow what the document says about resigning. Tell the person, any co-agent or successor agent and the banks, and hand over your records.

Questions can come up years later. Ask a lawyer or tax professional how long to keep them.