Margaret Hoag
This article was originally published on the EHMO Legal Blog.
If you have ever had Power of Attorney for a parent or another loved one, you are probably familiar with the frustration that comes with the job. Banks, financial institutions, and even utility companies seem to either have a lot of red tape around the use of a Durable Power of Attorney or reject it outright. Below are some strategies you can use to help with these situations.
In this discussion I will refer to the parent or person who has executed a Durable Power of Attorney as the “Principal”; and the child or person who has been given authority under the Durable Power of Attorney, the “Agent”. I will also use the abbreviation of “DPOA”.
First, take a breath.
Try to remember that these hurdles are in place to protect seniors and others from unscrupulous individuals. The bank or other financial institution has no idea if you are honest or not, and they are just trying to protect their clients and themselves. If the DPOA has to be sent to the legal department for review, just be patient. More importantly, do not wait until the last minute to provide a copy of the DPOA because it often takes two weeks or more to process the document and for the requested action to be taken.
Second, get the Principal on the phone.
If the Principal is still competent, call the company or institution with the Principal present so they can give authorization for you to communicate on their behalf. They may even have their own form to be signed by the Principal to allow for future communications. Also, consider taking them into the bank with you to close an account. Seniors might become confused by a lot of red tape, or perhaps they cannot hear well over the phone, and they ask their Agent for help. If this is the case, don’t fight to have the DPOA honored, just get the Principal involved. Company representatives will often ask the Principal a few security questions to verify their identity and mental capacity and then they can give the company permission to speak with you to get the instructions and information needed to complete the task.
Third, be smart.
There are many valid reasons why an Agent may need to close the Principal’s bank account. However, if you instruct the bank to close the Principal’s account and write a bank check to you, you will raise a lot of unnecessary red flags. Instead, you should have the check made out to the Principal. Remember, when working as an Agent under a DPOA, the money still belongs to the Principal. Likewise, don’t go online and close the account and transfer it to your own bank account at the same bank as banks routinely monitor online activity.
Fourth, provide the requested information.
Try not to be upset if you are asked for additional information and provide it as promptly as possible. Again, the bank is just protecting their client. Banks are worried about the following situations:
- the Principal is no longer alive;
- the DPOA has been revoked; or
- the Agent is trying to exercise a power that is not granted by the DPOA.
You may be asked to provide an affidavit indemnifying the bank which states that the Principal is alive, and that the DPOA has not been revoked. Some banks will ask for a doctor’s letter stating that the Principal is incompetent. (See above, if the Principal is competent, you may need to bring him/her into the bank or get him/her on the phone). If the Principal is incompetent, this letter confirms with the bank that the Principal is alive, and there is a good reason why he/she is not coming personally into the bank. The doctor’s letter may need to explain that the Principal is competent, but cannot speak over the phone, or is too disabled to leave the house. Personally, I have been asked to provide a certification for my clients that the DPOA was properly executed and is still in full force and effect.
The worst situation is if the DPOA is completely rejected. In that case, the first step is to find out the exact problem with the DPOA. It’s possible the bank representative does not know exactly why the legal department has rejected the DPOA. It’s important that you find out the exact reason even if you have to call the legal department yourself. If the reason is one of those discussed above, you may be able to provide additional information which will allow the bank to honor the DPOA.