Early in the new year, I met with Grace* to review her estate planning. She signed a new Will and Power of Attorney for Property (POA) naming her daughter, Julie,* as her executor and her attorney in the new documents.
Grace called me last week to let me know she had gone to her bank to give them the new POA document. She is getting older and, although her mind is still sharp, she likes the idea of Julie being able to manage her money for her. However the bank would not accept the POA because Grace had only an unsigned copy and hadn’t brought the original with her. The bank’s staff, trying to be “helpful,” offered to have Grace sign the bank’s POA form. However, they did not explain to her the problems that doing so could create.
I was very glad Grace had called so that we could review this with her. I cautioned Grace that sometimes a bank’s POA can inadvertently cancel or revoke a previously-signed, broad POA. The broad POA not only allows the attorney named in it to deal with the assets at the bank but also to file Grace’s tax returns, manage her other investments and sell her home if needed. These are just a few examples of things that a broad POA can be used for if it is properly drafted and not restricted to dealing with assets held at the bank.
Bottom line: If a bank’s form cancels or revokes a previously-signed broad POA, this could have disastrous consequences especially if the person is no longer capable and cannot sign a new POA.
What to do?
To avoid problems created by signing a bank’s POA, we recommend not signing any forms at the bank unless your lawyer has reviewed it first. This is especially important if you already have a signed POA document.
In fact, your lawyer-prepared POA is all that the bank needs to allow your attorney (the person you’ve named in the POA document) to deal with your assets and accounts at the bank. However, some banks require POA documents (which are not bank POA forms) to be reviewed by their legal department before the bank will recognize the document and allow the attorney to deal with assets held at the bank. This review can take several weeks to complete which can be problematic if the attorney needs to act on short notice.
To avoid problems and delays later, we recommend that you present your original signed POA to your bank and request that the bank have it on file for the time when your attorney needs to begin acting. By taking action in advance, you can rest easier knowing that all is in order and that your attorney can step in when it is time to act.
*Names have been changed to protect privacy.
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Blog posts pre-dated December 1, 2015 were originally published under Neff Law Office Professional Corporation.