Can a Power of Attorney Accept Checks?

by John Cromwell

Powers of attorney are popular devices people use to ensure their personal matters are taken care of in their absence. Financial managers, accountants and other types of agents may be granted power of attorney. Whether an agent with power of attorney can accept a check on his principal’s behalf depends on the type of check and how much authority the principal granted him.

Power of Attorney, Generally

A power of attorney is created through a document drafted by a person, called a principal, who wants to give an agent authority to act on his behalf. How much power an agent has under a power of attorney can vary. Under a general power of attorney, an agent can generally do anything on behalf of his principal that the principal would be able to do for himself. This would include the ability to accept and cash checks made out to the principal. The power of attorney can also be limited so that the agent can only do certain things for the principal. For example, a power of attorney can be written so that the agent only has the ability to accept checks on the principal’s behalf.

Durable Vs. Non-Durable

Traditionally, a power of attorney only lasts as long as the principal is alive or has mental capacity. This is called a non-durable power of attorney. However, a power of attorney can be drafted so that an agent retains the authority to act on the principal's behalf regardless of the principal’s mental status. This type of power of attorney is known as durable.

IRS Checks

In some instances, a simple power of attorney is insufficient to confer authority to an agent. If a principal wants to give authority to an agent to receive a refund check from the IRS, for example, he must complete Form 2848, provide the agent’s name and obtain the agent's signature. An income tax preparer cannot cash any check related to income taxes. However, any other agent can cash that check so long as he has been granted that authority through a properly executed power of attorney. The agent must also sign the check with his name, followed by a disclaimer saying that he is endorsing and cashing the check on behalf of the principal named on the check. The Treasury Department may not require any evidence of the power of attorney initially, but may request a copy of the power of attorney at a later date.

Social Security Checks

The Social Security Administration permits an agent to cash Social Security checks on another party’s behalf, but requires the agent to comply with another set of regulations. To qualify as a representative payee, a power of attorney is insufficient. To become a representative payee, the agent must complete form SSA-11 and participate in a face-to-face interview with a representative of the SSA. Generally, representative payees are only used when the recipient of the benefits is unable to manage their financial affairs.