Recently I had an experience where a title company refused to accept a Power of Attorney since it did not contain the language “before me appeared
Sometimes married couples wonder why a Financial Power of Attorney should be necessary when all their assets are jointly titled already and they have named each other as beneficiaries. Real estate is one example where a Financial Power of Attorney could be necessary even when dealing with married couples. Another is when a spouse needs to access a retirement account of a disabled spouse. By definition IRA’s are individual retirement accounts and cannot be joint.
From time to time we come across a situation when a bank refuses to accept a power of attorney. Never had it with title companies. With banks, it might be a question of formatting or witnessing or the bank might want to have the individual use the bank or financial institution’s standard form. The possibility that a power of attorney might be rejected may be one reason not to simply pull a form off the internet and hope it will be accepted.
There are detailed rules in Pennsylvania and other states regarding notices and acknowledgements and other provisions concerning what language needs to be used to effectuate certain purposes, gifting limitations being only one such example. If the document can be resigned correctly and the person who gave the power of attorney is still available, these issues might not be as much of a problem but if the person is now unable to sign or understand the document, as when he or she is suffering from dementia, this may be a major issue.
Under Act 95, a Power of Attorney law passed in 2014, substantial changes were made to Pennsylvania’s law that affected the wording, and witnessing and other requirements and protections for the party granting the Power of Attorney. This resulted from a 2010 case, Vine v. Commonwealth of Pa State Employees’ Retirement Board, 9 A.3d 1150 (Pa. 2010).
In Vine a Pennsylvania State employee, while she was incapacitated following a motor vehicle accident and a stroke was given a Power of Attorney to sign by her then husband. He changed her retirement options and then later filed for divorce. The issue was whether Mrs. Vine, after she recovered, could, by presenting evidence that the Power of Attorney may have been void at the time of her signing because of her condition, invalidate her estranged husband’s option and file for benefits. To everyone’s surprise it was found that that could and that started a years’ long quest for a compromise. Banks obviously could not investigate the background behind the signing of every Power of Attorney. Ironically, the Vine case did not even involve a bank.
Act 95 describes what a bank, financial institution or other party who is presented with a power of attorney can and cannot do. It provided immunity to anyone who accepts a power of attorney in good faith without actual knowledge that it is invalid. On the other hand there is potential civil liability for refusal to accept a power of attorney that meets all the requirements.
Sometimes, in an abundance of caution it may make sense to have on hand both your own general financial Power of Attorney prepared by your attorney and that bank or financial institution’s own standard form as well. One point to remember if you do, is to make them consistent.
Other considerations may arise that you might discuss with your attorney in advance. Some banks and financial institutions may, for instance, refuse a power of attorney that requires more than one agent to act together or that otherwise does not fit their standards. Should a refusal to accept the document be fought? As usual the answer is “it depends.”
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.