When you took the necessary and advisable step to create and sign a durable power of attorney, you might have felt relieved, secure in the knowledge that you were now prepared and protected with someone to take care of you if you were to become incapacitated.
However, The New York Times explains in “Finding Out Your Power of Attorney Is Powerless” that when you take a witnessed and notarized document to a financial institution, the institution may not accept the documents. They may not honor your power of attorney and insist that the account owner or owners sign the institution’s own power of attorney form. With National Estate Planning Awareness Week fast approaching, we’ll take a look at this common estate planning frustration.
It’s not an uncommon roadblock when you or an older relative are consolidating your accounts. Local banks or other institutions often will not accept a power of attorney if it’s not completed on their own forms. In the meantime, however, you or your relative could have developed dementia or another emergency situation could have occurred.
These are not rare occurrences. Estate planning and elder law attorneys often encounter financial institutions unwilling to honor valid powers of attorney. Even when state statutes require banks or other financial institutions to accept a durable power of attorney or waive their liability when they do accept it, attorneys have seen some institutions resist.
Financial industry executives have not given any estimates of how many banks and brokerages insist on their own power of attorney forms, but claim it is uncommon. Nevertheless, many financial institutions argue that they hold important assets and need to be careful when someone is asking for access to a customer’s account. This is a valid concern. Government agencies and advocacy groups warn us about the financial exploitation of seniors, particularly those with cognitive impairment.
But these financial institutions also have other motivations. When they insist on their own forms, they are concerned about liability.
What can you do? An estate planning or elder law attorney can help with banks and brokerages honoring valid powers of attorney by going above local managers to higher-ups. You can also be proactive by asking a brokerage or bank if it requires its own durable power of attorney document and, if it does, signing before a crisis situation arises.
It may seem like double the work, but by preparing now and working with an elder law or estate planning attorney to review these forms in advance, you will be better prepared if and when you need to represent a loved one or a loved one needs to represent you using the power of attorney.
At Family Estate Planning Law Group, we have worked with our clients to do exactly this for years as part of our ongoing maintenance program. We work with our clients to ensure trust documents, powers of attorney and other such documents are accepted by clients’ financial institutions as soon as possible. We know from experience that institutions often have their own processes, forms and idiosyncrasies, and it’s often easiest to work with their existing policies.
Since we firmly believe that the most critical part of estate planning is aligning assets with the plan, verifying that alignment with the financial institutions and tracking ownership of those assets over time, we work with clients to accomplish this. For more information about our process, explore our website and contact us to schedule your consultation today!
Reference: New York Times (May 6, 2016) "Finding Out Your Power of Attorney Is Powerless"