Jan52026
Estate Planning Q&A Series

Can someone with power of attorney create or update a trust and handle finances on the person’s behalf, and what limits apply? – North Carolina

Short Answer

In North Carolina, an agent acting under a financial power of attorney can usually handle many day-to-day financial tasks for the principal, but the agent’s authority depends on what the signed document actually grants. Creating, amending, revoking, or terminating a trust is not automatically included and typically requires express authority in the power of attorney or the trust document. A health care power of attorney does not give general authority over money or property, even if it allows broad medical decision-making.

Understanding the Problem

Under North Carolina estate planning law, can an agent named in a power of attorney manage finances for an older adult who has dementia and needs long-term care planning, and can that agent create or update a trust on the person’s behalf? What limits apply when family members worry about overspending, missing estate documents after a spouse’s death, and the need to locate and manage real estate and bank accounts while planning for sustainable support?

Apply the Law

North Carolina generally treats a power of attorney agent as a fiduciary. That means the agent must act for the principal’s benefit, keep appropriate records, and stay within the authority granted by the document. A financial (property) power of attorney can authorize banking, bill-paying, and property management, but it does not automatically authorize changing a trust. Under North Carolina trust law, an agent may represent the principal in trust matters only when the agent has authority for the specific trust question involved, and changing a revocable trust as the settlor is a special category that typically requires express permission in the power of attorney or the trust instrument.

Key Requirements

  • Valid authority in writing: The agent can act only if a properly executed power of attorney exists and the action falls within the powers granted in that document.
  • Fiduciary “best interest” duty and no self-dealing: The agent must act in the principal’s best interest and avoid conflicts, especially transactions that benefit the agent or shift assets away from the principal’s needs.
  • Express authority for trust changes: Amending, revoking, terminating, or otherwise changing a trust on behalf of the principal generally requires express authority in the power of attorney or the trust instrument, not just broad “general” financial language.

What the Statutes Say

Analysis

Apply the Rule to the Facts: The facts describe an older adult with dementia who needs long-term care planning and has family concerns about overspending. A financial power of attorney (if properly signed and still effective) can often allow the agent to locate accounts, pay bills, manage income, and sign facility-related financial paperwork, but the agent must act in the principal’s best interest and keep good records. If the family’s goal is to create a new trust or change an existing trust to protect assets or control spending, that step usually requires express trust-related authority in the power of attorney or the trust document; otherwise, the agent may need a court-supervised guardianship to obtain authority.

Process & Timing

  1. Who acts: The agent named in the financial power of attorney. Where: With the relevant financial institutions and, for care-related paperwork, the facility’s admissions/business office in North Carolina. What: Provide the signed power of attorney and any institution-specific agent certification/acceptance forms. When: As soon as financial management is needed, because delays can lead to missed payments or gaps in care planning.
  2. Confirm the scope before changing a trust: Review the power of attorney and the trust document for language that expressly authorizes the agent to amend, revoke, terminate, or create a trust for the principal. If that express authority is missing, treat trust changes as off-limits until proper authority exists.
  3. If authority is disputed or abuse is suspected: Consider steps that create accountability, such as requiring accountings and limiting access, and consider court involvement if necessary to protect the principal and stop improper transfers.

Exceptions & Pitfalls

  • Health care POA vs. financial POA confusion: A health care power of attorney can be broad for medical decisions but does not give general authority to manage money or property under North Carolina law.
  • Trust changes without express authority: Even a broad financial power of attorney may be insufficient to amend or revoke a trust unless the power is expressly granted in the power of attorney or the trust instrument.
  • Self-dealing and gifting risks: Many disputes arise when an agent makes gifts or transfers that benefit the agent or others, especially when the document does not clearly authorize gifting. Those actions can trigger claims for breach of fiduciary duty and efforts to unwind transfers.
  • Capacity “gray zone” and future challenges: When dementia is involved, family members often later dispute whether documents were signed with capacity or under undue influence. Careful documentation and planning steps can reduce the risk of later litigation.
  • Bank and facility acceptance issues: Institutions may require their own forms or may scrutinize older documents. Delays are common, so planning for document delivery and follow-up matters.

Conclusion

In North Carolina, a power of attorney can allow an agent to handle many financial tasks, but the agent must stay within the written authority and act in the principal’s best interest. A health care power of attorney does not authorize general financial management. Changing a trust is not automatic and usually requires express authority in the power of attorney or the trust document. The most practical next step is to gather and review the signed power of attorney and any trust documents to confirm whether trust amendment authority is expressly granted.

Talk to a Estate Planning Attorney

If a family is dealing with dementia, long-term care planning, and concerns about overspending under a power of attorney, an estate planning attorney can help clarify what the agent can and cannot do and what options exist to protect the principal. 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.

Category: Estate Planning Q&A Series

Author: Pierce Law

Pierce Law Group is a North Carolina law firm focused on probate administration, real estate partition matters, and surplus funds claims across North Carolina. We know these situations often come with stress, family dynamics, and time-sensitive decisions—so we prioritize clear communication, steady guidance, and a practical plan from day one. Our goal is to make a complicated process feel manageable, while protecting what matters most to you.