What Your Agent Can Do
You decide how much power your agent has. Most financial powers of attorney in Arizona cover a wide range of tasks, such as:
- Paying bills like your mortgage, utilities, insurance, and medical costs
- Managing bank accounts including deposits, withdrawals, and transfers
- Handling investments like buying, selling, or managing stocks, bonds, and retirement accounts
- Filing tax returns and working with the IRS or Arizona Department of Revenue for you
- Managing real estate including buying, selling, leasing, or upkeep of property
- Applying for benefits like Social Security, Medicare, or veterans benefits
You can give broad power or limit it to certain tasks. For example, you might give your agent full control over all finances. Or you might only let them manage one bank account.
In Arizona, you also choose when your agent's power starts. It can start right away or only when you become unable to act. See our FAQ on when a power of attorney goes into effect for more details.
Choosing the Right Agent
Picking the right agent is a big choice. Your agent should be someone you trust. They should be good with money and willing to act in your best interest. Many people pick a spouse, adult child, or close family member.
You should also name at least one backup agent. If your first choice cannot serve when the time comes, the backup can step in. No court is needed. Without a backup, your family may face the same costly conservatorship you were trying to avoid.
Under Arizona law, your agent has a legal duty to act in your best interest. They must keep clear records of all transactions. If they misuse their power, they can be held personally liable. You can also add rules or limits in the document for extra protection.
How a Financial Power of Attorney Works With Your Trust
If you have a revocable living trust, your power of attorney and your trust work as a team. Your trustee manages assets held in the trust's name. Your agent under the power of attorney manages everything else. This includes bank accounts, tax filings, and benefits still in your personal name.
Without both documents, gaps can show up in your plan. For example, if your retirement accounts are not in the trust, your trustee has no power over them. Your power of attorney fills that gap. To learn more, read our guide on what happens without an estate plan in Arizona.
What Happens Without a Financial Power of Attorney
Without this document, your family must ask the court for a conservatorship under A.R.S. Title 14, Chapter 5. A judge appoints someone to manage your money. That person must report to the court on a regular basis.
The first petition alone can cost $3,000 to $7,000 or more in legal fees. Ongoing yearly costs add thousands more. While the process plays out, your bills may go unpaid. Your accounts may be frozen. Your family has no legal way to help.
A financial power of attorney avoids all of this. It gives your chosen agent the right to act right away.
When to Create or Update Your Financial Power of Attorney
The best time to create this document is while you are healthy and able to make your own choices. Once you lose the ability to decide, it's too late to sign one. Arizona law says you must be of sound mind when you sign.
You should also review your power of attorney when your life changes. Common reasons to update include a divorce, a move to or from Arizona, the death of your named agent, or a big change in your finances. At RJP Estate Planning, attorney Clint Smith and our team review these documents with clients to make sure they still match your wishes.