Powers of Attorney/Third Party Representatives for Retirees
Overview
Many states let a Power of Attorney (POA) handle another person’s finances or other legal paperwork regardless of that person’s competency. These state laws often conflict with federal laws. Military retirement pay falls under federal law, which takes priority over state law.
DFAS has several avenues for allowing a loved one or trusted individual to help with a retiree’s account. These avenues are called “third-party representation” and they fall into two categories, either non-pay-related or pay-related representation.
***Retirees and Guardians/Legal Representatives of Retirees***
We are working to simplify the process of verifying continuing eligibility for retirees. The newest change reduces the number of retirees who need to submit a Report of Existence (ROE). Now, the only retirees who need to submit an ROE are those who receive a paper check to a foreign address. Previously, the legal representatives for all incapacitated retirees were required to submit an ROE twice each year.
Non-Pay-Related versus Pay-Related Representation
Non-Pay-Related (e.g., General Power of Attorney)
A third-party representative (e.g., General Power of Attorney) who is granted non-pay-related authority cannot make changes to retiree payments (banking information) from DFAS. The representative may assist the retiree in many other matters, such as:
-
Correspondence address changes
-
Issuing account statements and 1099 forms
-
Completing reports of existence
-
Requests for copies of documents
-
Obtaining account information protected by the Privacy Act of 1974
Pay-Related
A third-party representative with pay-related authority can control and make changes to the banking and pay information for the retiree account at DFAS.
They can also make non-pay-related changes.
Below is a table summarizing the types of non-pay-related and pay-related third-party representations and the requirements.
Third-Party
Representative Type
|
Authority
|
Documents
Required
|
| |
|
|
General Power
of Attorney (GPOA) |
Non pay-related matters only;
terminates upon incapacity
of retiree |
Executed Power
of Attorney
|
| |
|
|
Special Power
of Attorney for
Allotments (SPOA) |
Establish, change or stop
allotments only |
Executed Special Power
of Attorney – must specify
ability to establish, change,
or stop allotments |
| |
|
|
Durable Power
of Attorney (DPOA) –
“Immediate” |
Pay-related and
non-pay-related |
Executed Durable Power
of Attorney (DPOA) and
signed medical statement;
DPOA must say
“Durable” in title |
| |
|
|
Durable Power
of Attorney (DPOA) –
“Springing” |
Pay-related and
non-pay-related –
but only after
medical statement
received
|
Executed Durable Power
of Attorney (DPOA)
without medical statement;
DPOA must say
“Durable” in title;
Springing means it takes
effect only when
medical statement
is received
|
| |
|
|
Trustee |
Pay-related and
non-pay-related |
Medical statement;
DFAS will appoint trustee;
trustee required to post
bond and report annually
|
| |
|
|
|
Court-Appointed
Guardianship
|
Pay-related and
non-pay-related
|
Court order signed
by a judge
|
Specific Types of Third-Party Representation
Non-Pay-Related Authority
General Power of Attorney
A General Power of Attorney (GPOA) allows a third party to make non-pay-related changes. The retiree cannot be incapacitated and must sign a Power of Attorney document appointing the agent. No medical evaluation is needed.
Pay-Related Authority
Special Power of Attorney for Allotments
A Special Power of Attorney (SPOA) may be used to establish, change, or stop an allotment. The Special Power of Attorney document specifically must state the authority to establish, change or stop allotments. A General Power of Attorney is not acceptable to establish, change, or stop an allotment.
Durable Power of Attorney
A Durable Power of Attorney (DPOA) is a newly-authorized third-party representation for retired pay, and currently only applies to retirees. The authority granted to the third party, usually called an agent, is stated in a Durable Power of Attorney document and includes the ability to make both pay-related and non-pay-related changes to the retiree account at DFAS. The Durable Power of Attorney document must say “Durable” in the title.
The retiree must sign the DPOA document and appoint the agent (prior to incapacitation).
The DPOA is effective only when the retiree becomes incapacitated and we receive a medical statement signed by a Medical Doctor (M.D.) or Psychiatrist.
There are four requirements for the medical statement. The statement must include:
- A statement that the retiree is (at the time of evaluation) medically incapable of managing his or her affairs;
- A description of the condition afflicting the retiree which led to this diagnosis;
- A statement regarding the retiree’s prognosis for possible improvement; and
- A statement that the determination of incapacity was made based on both a physical examination and mental evaluation of the retiree.
The medical statement must be signed by a Medical Doctor (M.D.) or Psychiatrist. It cannot be signed by, for example, a Psychologist, Doctor of Osteopathic Medicine, Nurse, Physician Assistant, Registered Nurse or Clinical Social Worker. Also, the date on the medical statement must be no earlier than four months prior to its receipt by DFAS.
Trusteeship
A trusteeship grants pay-related authority to a trustee on behalf of an incapacitated retiree who has neither a Guardian nor an agent for a Durable Power of Attorney. A medical statement of incapacity is required. The trustee is appointed by DFAS. Trustees are required to post a bond and provide an annual report to DFAS.
Court-Appointed Guardianship
A guardianship is based on an order of a court appointing a guardian for the retiree’s estate or property, which would encompass the retiree’s account at DFAS. A guardianship requires a certified copy of the court order, signed by a judge, bearing the seal of the court and showing the appointment of the guardian. A guardianship takes precedence over any other third-party representation on file at DFAS.
Frequently Asked Questions (FAQs)
Q. I am a retiree who is physically and mentally active but having some difficulty keeping track of all my correspondence with DFAS. I would like someone I know and trust to assist me in this. What do I need to do?
A. You can send us a General Power of Attorney (GPOA) document signed by you and appointing an agent to correspond with us. A GPOA can assist with matters such as:
- Correspondence address changes
- Issuing account statements and 1099R forms
- Completing reports of existence
- Making requests for copies of documents
- Obtaining account information protected by the Privacy Act of 1974
A GPOA agent cannot make any changes relating to your retired pay itself, such as changing the bank address where you receive your pay. Also, a GPOA remains in force only so long as you are not incapacitated.
If you wish to take advantage of a General Power of Attorney, please have one prepared, sign it and send it to us. The GPOA can be titled simply “Power of Attorney” or “General Power of Attorney” or use similar language. To avoid the document being treated as a Durable Power of Attorney (and therefore not in effect since you are not incapacitated), the title cannot include the word “Durable”, nor can any of its provisions mention the word “durable” or be described as remaining in effect if you ever become incapacitated.
Q. I am a retiree who is physically and mentally active and generally can take care of my correspondence with DFAS. However, managing my allotments has become difficult. I would like someone I know and trust to assist me with tracking allotments and keeping them up to date. What do I need to do?
A. You can send us a Special Power of Attorney (SPOA) for allotments signed by you, and appointing an agent to correspond with us only with regard to establishing, changing, or stopping your allotments. The SPOA document must specifically state the authority to establish, change or stop allotments. A General Power of Attorney cannot be used for this purpose.
Q: I am a retiree and I would like to make arrangements for someone else to take care of my account in case I need it in the future.
A: You can send us a springing Durable Power of Attorney (DPOA) signed by you and appointing an agent to manage your account if you later become incapacitated. The springing DPOA document will not be effective unless you later become incapacitated. At that time, your agent will need to send us evidence of your incapacity in the form of a medical statement signed by a Medical Doctor (M.D.) or Psychiatrist. When we receive the medical statement, the DPOA will “spring” into effect.
Q: How is a Durable Power of Attorney different from a General Power of Attorney?
A: A Durable Power of Attorney, or DPOA, differs from a General Power of Attorney, or GPOA, in two important ways:
While a GPOA agent can only assist with non-pay-related matters, a DPOA authorizes an agent to make pay-related changes as well as assist with non-pay-related matters.
A DPOA takes effect only after you become incapacitated. A GPOA is effective only when you are not incapacitated.
Q: What must the Durable Power of Attorney medical statement have in it?
A: There are four requirements for the medical statement. The statement must include:
- A statement that the retiree is (at the time of evaluation) medically incapable of managing his or her affairs;
- A description of the condition afflicting the retiree which led to this diagnosis;
- A statement regarding the retiree’s prognosis for possible improvement; and
- A statement that the determination of incapacity was made based on both a physical examination and mental evaluation of the retiree.
The medical statement must be signed by a Medical Doctor (M.D.) or Psychiatrist. It cannot be signed by, for example, a Psychologist, Doctor of Osteopathic Medicine, Nurse, Physician Assistant, Registered Nurse or Clinical Social Worker. Also, the date on the medical statement must be no earlier than four months prior to its receipt by DFAS.
Note: The information on this website is provided to explain typical situations regarding retiree and annuitant benefits. For details and exceptions, please see applicable laws, financial management regulations, and instructions.
Page updated Dec 20, 2021