How To Avoid Your Bank Refusing Your Power of Attorney
Often we look to a Power of Attorney only when we need to use it. At that time, if the person who gave it to you is incapacitated, it can be too late. To avoid complications that are frustrating, annoying and possibly unnecessary, there are some steps you can take to protect both yourself and the person appointing you in advance.
Recognize That Not All Powers of Attorney Are Alike. Sometimes it is assumed that a Power of Attorney is a standard document and all contain the same or similar wording and the same provisions. While many powers are similar, there are some differences that can be significant in the individual case. If you pull a Power of Attorney from the Internet or a form book, it may or may not contain what you need in the individual circumstance.
There are differences among States. Powers of Attorney in Pennsylvania and many other states require certain specific wording and specific formalities. A Power of Attorney could be rejected if the specific wording is not contained in the document. For instance, the Notice page in Pennsylvania described in the statute must contain the exact wording and be signed by the person giving the Power. The Acknowledgement, the statement that is signed by the Agent, also has specific wording.
While the Acknowledgement can be added later the Notice strictly speaking should be signed by the person giving it to you at the time the document is signed originally. There must be two witnesses to the signatures of the person who gives you the Power, neither of them can be the Notary, and the signature of the person who gave you the Power must be notarized. Pennsylvania’s law regarding Powers of Attorney was changed some years back. If the document was properly executed at the time it is still good but it is better practice to redo the document under the current law anyway.
Know the difference between an immediate power of attorney and a “springing” power. Some of the older powers of attorney especially and some today indicate they do not take effect unless one or more doctors certify the person who gave it is unable to act. This adds another step and may be difficult to obtain especially in an emergency. Physicians may be understandably reluctant in some cases to attest to a patient’s inability to act and this probably should be unnecessary. The implication is that there is concern the person receiving the Power might not act responsibly. If so, our office advises where there is hesitancy to trust the person receiving the power of attorney to act on your behalf you should not give him the power of attorney in the first place. Generally speaking we provide a Power of Attorney that can take effect immediately. To avoid confusion sometimes clients simply tell the person they are appointing where to locate the original documents when needed.
Note what powers are given under the power of attorney and which are not. Not all powers of attorney are the same. If the power is not given in the document it might be difficult to enforce at a later date. Examples of this type of problem could arise regarding gifting, transfer of real estate or handling of specific types of assets such as IRA’s which, by definition, are individual.
Some Powers of Attorney are rejected even though they are in compliance under the law. Some banks and financial institutions may, for instance, refuse a power of attorney where there is more than one agent or that otherwise does not fit their standards. Should a refusal to accept the document be fought? As usual the answer is “it depends.”
The bank or financial institution might want you to use their form. If so, it may make sense where possible simply to also use their form. On the other hand, if you cannot go back and there is an emergency or the person who signed the power of attorney cannot act, then it may make sense to fight the decision. There is provision in the law, specifically Act 95, covering that the circumstance. In the meanwhile if you are not sure whether your power would be accepted by your bank, this may be time to check and again review the language and formatting with your estate planning or elder law attorney to make sure it fits current standards.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.