Can a financial power of attorney be used to deal with a disability benefit that stopped or needs to be restarted? – North Carolina

Short Answer

Sometimes. In North Carolina, a properly signed durable (financial) power of attorney can let an agent handle many financial tasks tied to benefits, such as contacting an agency, gathering records, and managing deposits and bills. However, some disability programs—especially federal programs—may require their own authorization or a separate “representative payee” appointment before they will discuss or restart benefits with an agent. The safest approach is to confirm what the specific benefit program will accept and make sure the power of attorney includes the right powers.

Understanding the Problem

Under North Carolina estate planning law, the key question is whether an agent named in a general durable (financial) power of attorney can act for a relative to address a disability benefit that stopped or needs to be restarted. The decision point usually turns on whether the benefit program will recognize the agent’s authority for that specific task and whether the document grants the agent the right kind of financial and claims-related powers. Timing can matter because benefit programs often have deadlines to appeal a termination or to submit requested paperwork to resume payments.

Apply the Law

In North Carolina, a health care power of attorney and a durable (financial) power of attorney do different jobs. A health care power of attorney is for medical decisions and access to medical information, and it does not give general authority over money or benefits. North Carolina law makes that separation clear: a health care agent’s authority is limited to health care matters and does not confer general power over the principal’s property or financial affairs. See N.C. Gen. Stat. § 32A-19 (limits of health care agent authority).

A durable (financial) power of attorney is the document that typically allows an agent to handle financial matters, including dealing with income streams and accounts where benefits are deposited. Even with a valid North Carolina power of attorney, a benefits administrator may still require its own release form, proof of identity, or a separate appointment process before it will communicate with an agent or allow changes to benefit status. When the benefit is a federal disability program, federal rules and agency procedures often control what the agency will accept.

Key Requirements

A valid, effective financial power of attorney: The document must be properly executed and in effect when the agent tries to act. Many durable powers of attorney are effective immediately when signed, but some are “springing” and only become effective after a stated event (often incapacity) is proven.
The right scope of authority: The power of attorney should clearly authorize the agent to handle financial matters that come up in benefit problems—such as communicating with agencies, signing forms, pursuing claims/appeals, obtaining records, and managing bank accounts where benefits are paid.
Program acceptance and paperwork: The agency or plan paying the disability benefit may require additional steps (for example, its own authorization form or a separate payee/authorized representative process) before it will discuss the case or restart payments.

What the Statutes Say

N.C. Gen. Stat. § 32A-19 (Health care power of attorney; limits) – Confirms a health care power of attorney is for health care decisions and does not give general authority over property or financial affairs.

Analysis

Apply the Rule to the Facts: Here, the documents described include both a health care power of attorney and a general durable (financial) power of attorney, signed with notarization and required witnesses. The health care power of attorney helps with medical decision-making and medical information, but it is not the tool to fix a stopped disability payment. The durable (financial) power of attorney is the document that is usually used to contact the benefit payer, submit paperwork, and manage the account where payments are deposited—so long as the benefit program will recognize the agent or provides a separate authorization process.

Process & Timing

Who acts: The agent named in the durable (financial) power of attorney. Where: With the office or administrator that pays the disability benefit (often a federal agency or a private insurer) and, if needed, the financial institution receiving deposits. What: Provide a copy of the signed power of attorney and complete any program-specific “authorized representative” or release forms the payer requires. When: As soon as the benefit stops, because many programs impose short deadlines to respond to notices or to appeal a termination.
Confirm the reason for the stoppage: Common triggers include missing paperwork, a periodic eligibility review, a change of address, a change in direct deposit, or a request for updated medical documentation. The agent’s job is usually to obtain the notice, identify what the payer says is missing, and submit the requested items in the format the payer requires.
Escalate if the payer will not accept the POA: If the payer refuses to speak with the agent under the power of attorney, the next step is typically to follow that payer’s internal process to name an authorized representative or, for some federal benefits, to seek appointment as a representative payee. If the relative cannot manage finances and no administrative workaround exists, a North Carolina guardianship case may be the backstop option.

Exceptions & Pitfalls

Health care POA vs. financial POA confusion: A health care power of attorney generally does not authorize benefit management. North Carolina law expressly limits the health care agent’s authority to health care matters. See N.C. Gen. Stat. § 32A-19.
“Valid document” does not always mean “accepted by the program”: Even a properly executed North Carolina financial power of attorney may not be enough for a particular disability payer to release information or change benefit status without its own forms.
Scope problems inside the financial POA: If the power of attorney is narrowly drafted, the agent may be blocked from signing claims paperwork, pursuing an appeal, or accessing records needed to restart benefits.
Capacity and timing issues: If the relative no longer has capacity and the financial power of attorney was never properly executed (or is being challenged), the agent may have to consider a court process (often guardianship) to get authority to act.

Conclusion

In North Carolina, a durable (financial) power of attorney is usually the right document to address a disability benefit that stopped, because it covers financial and administrative tasks tied to benefits. A health care power of attorney generally does not provide that authority. Even with a valid financial power of attorney, the benefit program may require its own authorization or appointment process before it will communicate or restart payments. The next step is to contact the benefit payer and submit a copy of the financial power of attorney and any required program forms before the notice deadline expires.

Talk to a Estate Planning Attorney

If a disability benefit stopped and an agent needs to use a financial power of attorney to fix it, our firm has experienced attorneys who can help clarify whether the documents are usable and what steps the benefit program is likely to require. Call us today at [919-341-7055].

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.