A Financial Power of Attorney: Why Banks Sometimes Might Refuse To Accept Yours
You’ve created an estate plan, assigned a Financial Power of Attorney (POA) and when it comes time for your POA to execute a function, the bank refuses to accept it.
This doesn’t happen often, but it does happen, and it can really throw a wrench into the works especially when bills must be paid.
Today, banks are hyper-sensitive and on the lookout for identity theft, scams, and elder abuse, so you must make sure your Financial Power of Attorney or POA is created and executed correctly.
And you want to make sure that the person you’ve chosen to be your POA is trustworthy. With that understanding, one of the most common reasons for a bank to refuse a POA is because it isn’t durable.
Durable Power of Attorney
A POA comes into effect when the person who made the POA is incapacitated in some way. So, the POA must be made to last (be durable) even during the incapacitation. In some states, POAs are durable by default, but in states where it isn’t, the document must include an explicit statement. In Georgia, your POA is durable by default unless it explicitly states that it terminates when you become incapacitated.
A Financial Power of Attorney Doesn’t Take Effect Until…
Another reason a bank might refuse a POA is because some POAs are written so that they don’t take effect until incapacitation has been demonstrated. The POA usually sets out the procedure for proving that the POA maker is now incapacitated. For example, someone, usually a doctor, might need to certify that you’re no longer able to make your own financial decisions. Third parties like financial institutions will take these procedures very seriously, with good reason.
Your POA Is Too Old Or Is Not On The Specific Bank’s POA Form
This is not always a defendable reason for a bank to reject your POA. But once again, it has and does happen. The best way to avoid this is to review your documents on a regular basis and make sure everything is updated if there are life events that have made changes necessary.
One Way To Avoid Issues
I often suggest that clients submit a newly created POA to the bank for approval before ever needing to use it. In other words, file your durable power of attorney with your financial institution before you become incapacitated so it’s already in the system. You might also ask that your POA make a small transaction for added assurance.
Work With An Experienced Attorney on Your Financial Power of Attorney
So many issues can be avoided by working with an experienced attorney who can help you create airtight legal documents. The Estate & Asset Protection Law Firm supports our clients in the creation of a long-term care plan for preserving assets, maximizing independence, and enhancing quality of life. If you have had issues with financial institutions refusing to accept your POA, give my office a call at 404-370-0696 and let us review your legal documents and help you prepare for the best possible outcome.
Looking to find an experienced estate lawyer in the Georgia area who is skilled in asset protection and estate plan preparation? Shannon Pawley is an attorney in Georgia with expertise in estate planning and asset protection. Shannon can provide assistance with creating an estate plan to include making a will and how to establish a trust properly. If you have questions about asset protection or questions about making an estate plan, reach out to Shannon and she will be glad to help answer all the estate planning questions you might have!