Power of Attorney

Can I Use a Power of Attorney for My Parent's IRA?

My mom's retirement account was the last thing I got to, and it's the only one that came with a deadline attached. The checking account, the credit cards, the utility bills. Those I sorted out over a few long weekends once I had access. The retirement account had a gatekeeper of its own, paperwork of its own, and a withdrawal the IRS expects every year whether or not she's in any condition to ask for it.

I still handle that withdrawal for her. It's the piece of her money I move most carefully, because getting in and being allowed to act turned out to be two different problems.

Can I use a power of attorney for my parent's IRA?

Usually yes. But the company holding the account decides that on its own terms, and there's a real chance it won't accept the document sitting in your folder.

A power of attorney is a private document between your parent and you. The custodian isn't a party to it, so before anyone there moves a dollar, their legal department reads what your parent signed and decides whether it covers this account. Some accept an outside durable POA. Some accept it only alongside their own notarized affidavit. Some want their form and nothing else.

So call and ask what they need, and do it before there's anything urgent riding on the answer. If you're not yet sure which accounts exist, the old tax return and the mail will tell you faster than guessing will.

Why does the brokerage want its own power of attorney form?

Because if they let the wrong person move that money, they're the ones who pay for it. None of this is personal, though it lands that way at the counter.

What it means in practice is a form, a notary, sometimes a branch visit, and sometimes a wait while someone in legal reviews it. It's the same review a bank runs on the document, just with a longer memory for liability.

Here's the part that catches families, and it's the reason this post exists. Their form has to be signed by your parent, not by you. Signing it takes capacity. So the window for the easy version of this closes on its own schedule, and it usually closes before anyone thinks to check. If your parent can still sign today, an afternoon of forms is the highest-return work available to you.

What if it's a 401(k) at their old employer?

Then the plan's rules decide, not just the custodian's. Plenty of employer plans have no real process for an agent at all.

An IRA is your parent's own account at a firm. A workplace plan runs on its own plan document under federal rules, and the recordkeeper answers to the plan, not to you. Ask what the plan actually permits, in those words, rather than assuming the answer matches the IRA down the street.

The usual route out is rolling the balance into an IRA at a custodian that does recognize an agent. Notice the trap in that sentence: the rollover is itself an action requiring authority. If your parent can no longer sign and the plan won't recognize you, that door can close entirely, and what's left is the court route. Deal with the workplace plan first. It's the stubborn one.

What can't a power of attorney do with a retirement account?

It can't make you the owner, and on its own it often can't change who inherits.

Ownership first. There's no joint version of a retirement account, and no way to retitle it to you while your parent is alive. That's different from the joint checking account families reach for, and the difference matters before anyone suggests consolidating everything.

Then the beneficiary form. Many states treat changing a beneficiary as a power that has to be written into the document in so many words, because a general grant to manage property isn't consent to redirect an inheritance. Custodians decline changes that aren't clearly authorized, and a change made without that authority can be unwound later. That form is also what moves the money after your authority has already ended, which is exactly why nobody lets an agent near it casually.

Does the required withdrawal stop if my parent has dementia?

No. Once your parent is old enough that a required minimum distribution applies, it keeps coming due every year, and the diagnosis doesn't pause the calendar.

Miss one and there's a penalty tax on the amount that should have come out. The IRS will reduce or waive it when the shortfall had a reasonable cause and gets corrected, with the right form and an explanation filed. Serious illness is the sort of reason people raise. I wouldn't plan around it. Ask a tax professional what applies to your parent, then put the date somewhere you'll see it.

The practical fix is boring and it works: ask the custodian to calculate the amount and set it to distribute automatically into your parent's checking account each year. Then it doesn't depend on you remembering in a hard December. If some of that money sits in an annuity instead, that's a different contract with different rules, and the withdrawal is income on the return you're now filing for them. Sequencing all of this without tripping over yourself is much of what the full guide walks through.

Frequently asked questions

Can I put my parent's IRA in my name?

No. A retirement account has one owner and no joint version, and it can't move to an adult child during your parent's lifetime the way a house or a car can. A power of attorney gets you authority to act on the account, not ownership of it. Money only leaves as a distribution, and that distribution is your parent's taxable income.

Can I use my parent's IRA to pay for their memory care?

Generally yes, once the custodian has accepted your authority. The clean way is to have the distribution deposited into your parent's own checking account and pay the facility from there, so the money never sits anywhere with your name on it. Talk to a tax professional first, since a large withdrawal is income in the year it comes out.

My parent can still sign. What should we do this week?

Call every institution holding a retirement account and ask what they require from an agent. Then have your parent sign that firm's own form while they still can. It's the highest-value hour a family gets at this stage. It's also the first one to disappear.

This isn't legal, tax, or financial advice — it's a plain-language account of how this plays out in real families, written from managing my own mom's finances since her diagnosis. Power of attorney law varies by state, every custodian and workplace plan sets its own requirements, and federal retirement and tax rules change. Confirm what your parent's institutions require directly with them, and talk to an elder-law attorney licensed where your parent lives and a tax professional before moving money in or out of a retirement account.