Take a Closer Look at Whether You Have a Valid Power of Attorney in Place
Any responsible person with a comprehensive estate plan in place understands the importance of including among that plan a durable power of attorney. This document allows a designated relative, loved one, or other trusted individual to make decisions regarding your legal or financial affairs on your behalf if you become unable to do so. A recent article published in the New York Times shows, however, that many executed and notarized powers of attorney are not being honored by financial institutions. This can have extremely challenging results when the individual, who at one time granted power of attorney to someone else, has become incapacitated and is unable to understand the consequences of signing a revised document.
Granting someone the power to withdraw funds from your accounts and pay bills on your behalf is a serious decision, requiring a great deal of trust to be placed in the person you choose. The bank to whom a signed and notarized power of attorney is presented also understands the potential risk involved in honoring that document. The bank does not want to be in the position of honoring the power of attorney where it was fraudulently signed, subsequently revoked, or signed by someone lacking the true mental capacity to understand its significance. This could result in the bank being held liable for any funds stolen from the incapacitated person. In reaction to this fear of liability, banks have begun rejecting the power of attorney form being presented to the bank after an older or ill person has become incapable of handling their own finances, insisting instead that the incapacitated person sign the bank’s own version of a power of attorney.
The idea of requiring a revised power of attorney once a power of attorney becomes necessary to use, however, comes with obvious problems. The individuals entrusted with this power are often at a loss as to how to move forward. If you fear that you or your chosen representative may end up in a similar position in the future, you may want to check now to see if your bank requires that you use a power of attorney of their own creation. That said, be sure to have an attorney review that document before you execute it, as some banks insert language that either weakens the powers granted to the representative, or limits the parties to arbitration rather than allowing them to file a lawsuit should a conflict arise. If you have already had a power of attorney rejected by the bank, all is not lost. A skilled estate planning attorney can often successfully negotiate with the bank on your behalf to have a valid power of attorney accepted where the execution of a new version isn’t an option.
If you are in search of an experienced and compassionate New York attorney to assist with the creation of a power of attorney, trust, will, or full estate plan, contact the Hudson Valley wills and trusts attorneys at Rusk, Wadlin, Heppner & Martuscello for a consultation, in Kingston at 845-331-4100, and in Marlboro at 845-236-4411.