Is Your Power of Attorney Powerless?

Imagine that you’re the designated Agent under a power of attorney for a loved one, and the time has come for you to make medical and financial decisions. You take the signed and notarized document to the bank so you can gain access to their funds, only to have the bank tell you that they won’t accept it. The power of attorney has no power.

Instead, they tell you, you’ll have to fill out a new form—one that is specific to the bank in question. Which presents an even greater problem: if the person you’re representing is too incapacitated to manage their own estate, how are they going to legally sign a new form?
It’s a nightmare scenario that no one wants to experience, but it’s happened to many people throughout the country, and it could happen to you.

You may be asking yourself, “How could this happen?” If you’ve gone through all the legal requirements to create a power of attorney, how could a financial institution reject it?

The answer can often be found in the details of a bank’s policy. Financial exploitation is a prominent form of elder abuse, and many banks have employed safety measures to protect their clients from potential maltreatment and themselves from any liability.

So this problem, while obviously frustrating and financially dangerous, isn’t exactly insidious in nature. In fact, it can be a very effective way of protecting assets from misuse. You can avoid any issues by taking action today.

If you have already executed a power of attorney, or plan to do so in the near future, it is recommended that you contact every bank, brokerage, or firm where you have an account, and inquire as to whether or not they have their own POA forms that you need to fill out.

However, you should not sign any paperwork until you have your attorney careful review the documents. According to an article from the New York Times, some forms “can contain disadvantageous indemnity or arbitration clauses, or provisions that contradict the individual’s general power of attorney.” Such situations may require you to take a matter to court.

If you do happen to find yourself in a situation where your power of attorney has been rejected, there is a course of action you can take: have your lawyer appeal to the upper echelon of the institution’s hierarchy.

In the same article cited above, Craig Reaves, a past president of the National Academy of Elder Law Attorneys said, “Once we get to the right people, they accept it. I’ve never had to go to court or even threaten litigation.”

Of course, the downside is that this takes more time to accomplish. It’s in your best interest to prevent this problem before it can happen.

If you have a power of attorney, or have been designated as an agent by a friend or family member, and would like to eliminate any risk of being rejected by your bank(s), contact the lawyers at Stanko, Senter & Mitchell today.