Powerless Powers of Attorney

PowerlessnessYour parents or other relatives signed a durable power of attorney, which lets you handle their finances in the event they become incapacitated, right?  Well, maybe.

Whenever my office drafts a General Durable Power of Attorney for a client, the first thing we tell them is put it on file with all the financial institutions they deal with.  Why, you might ask, I certainly don’t want my agent acting for me now!  The problem arises however, when your agent does need the document to be effective.  They present a perfectly witnessed and notarized legal document to a financial institution and the financial institution does not accept it – they insist that the account owners sign the institution’s own power of attorney form.

When helping an older relative consolidate his or her accounts, you run into this roadblock. The local bank wouldn't speak with you despite your power of attorney which they claim they require on their form. In the meantime, the relative has developed dementia and does not have the capacity to sign legal documents.

This is not a rare occurrence.  Elder law attorneys often encounter financial institutions unwilling to honor valid powers of attorney. Even when state statutes require banks to accept a durable power of attorney, even waiving the bank's liability when they do accept it, I have seen some banks resist. How fast can you say: Bank of America?

Financial industry executives have not given any estimates of how many financial institutions insist on their own power of attorney forms. Banks argue that they hold important assets and need to be careful when someone is asking for access to a customer's account. Granted, that is a valid concern. Government agencies and advocacy groups warn us about the financial exploitation of seniors, particularly those with cognitive impairment.

But the banks also have other motives. When they're insist on their own forms, what they are really concerned about is their own liability.  What can you do? If it is too late to fill out ‘their form’, I try to assist my clients by going over the local managers' heads by speaking directly with their bosses. However, the best solution is the one I have already provided.  Make sure you are proactive by immediately asking the financial institution if they will honor the Power of Attorney you just signed or whether they will require that you submit their durable power of attorney form.  That’s the secret to creating an estate plan that works; it’s all in the planning.

If the bank requires you to complete their form, read it carefully or better yet, have your estate planning attorney review it because these forms can have disadvantageous indemnity or arbitration clauses—or provisions that contradict the individual’s general power of attorney.

Call our office to schedule your complimentary consultation or register online for one of our educational seminars on topics of interest to you and your loved ones.  Visit us at www.zarembalaw.com to view our revamped website that makes planning a breeze!

Reference: New York Times (May 6, 2016) "Finding Out Your Power of Attorney Is Powerless"


Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter
Share on linkedin
Share on Linkdin
Share on pinterest
Share on Pinterest

Leave a comment


We have a LOT more where that came from!

We hate spam too. We will never share or sell your information.

Call Now ButtonCall Us Now https://jsfiddle.net/7h5246b8/

Request a free consultation

We hate spam too. We will never share or sell your information.

We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
  • We launched the rollout of our on-demand webinar early so that new clients and our allied professionals can view the important component parts of ‘an estate plan that works’ at their convenience.  That is available on our website.
  • Live video workshops will be produced as quickly as possible and certainly ahead of our previous schedule; we will keep you posted as these events become available. Given the ‘boutique’ nature of the firm, we rarely have more than ten people in our office including team members at any one time. During this period of ‘social distancing,’ we promise to have no more than 8 people at any time.   This allows us to comply with the Governor’s directive to limit in-person gatherings.
  • The best way to communicate with us is still by phone during regular office hours of 8:30 to 5:00, Monday through Friday, or, you can email any of our team members (that is, their first name followed by @zarembalaw.com).  We will respond to these emails as quickly as possible.
  • Please continue to follow the directives of our local, state, and federal agencies. For your health and in consideration of our team who is assisting you, if you’ve scheduled an office appointment or planned to drop off paperwork and are experiencing a fever, dry cough, or shortness of breath, please contact your primary care doctor for guidance and then our office to reschedule.

Thank you, Walt and the Zaremba Team

Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.