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When a Bank Refuses to Accept a Power of Attorney

by Chris Cooper, Financial Planning Expert
October 01, 2015

Question: I got a power of attorney from my aging mother in advance. Her health has deteriorated and she is incapable of making decisions. But my bank is refusing to accept the POA she signed. What should I do?

Answer: This happens a lot. Banks, insurance companies, brokerage firms, mutual fund companies, pension plans, and all DO NOT HAVE to accept Powers of Attorney especially if the document does not say you, as the agent under this document, can transact business with your mother’s particular accounts.
I have seen Powers of Attorney that simply say “my agent in fact can do anything I would do” and these will rarely be accepted,if at all,  because banks and other financial institutions have had too much theft from abusers of the elderly. Every kind of financial institution and every type of situation (such as filing income tax returns, handling pension plan and other retirement  withdrawals, dealing with life insurance companies, and MORE, must be spelled out entirely!
You MUST have an attorney who knows what they are doing to draft a very broad, multi-page Durable Power of Attorney if you want any chance of these documents being accepted. Also, you MUST go to the financial institutions WITH YOUR PARENT , where your parent has their accounts and ask them to review the document BEFORE you need to use it. While this is not a guarantee that the institution will accept it (because financial institutions get bought by other financial institutions) you cannot assume that any business will accept the delegation of authority that the Principal of the POA (your parent)  is conveying to you. Some financial institutions, particularly Life Insurance companies, which are the only companies that issue annuities, require their own POA form specifically for their company, so this takes a lot of advanced planning. 
Under NO circumstances should you add your name as an owner to your parent’s accounts, as this makes you an owner, and if you get sued, your parent’s money and property could be taken by a court to satisfy a judgment against you. Also, it will defeat your parent’s estate planning, as you will be the owner of her accounts. Also, a trustee of a living trust cannot delegate authority with a power of attorney document, and a successor trustee of a living trust cannot handle  retirement plans and life insurance annuities, because these plans are not owned by the trust (even if the trust is named as the beneficiary).
Because you have the problem that your mother is incapacitated, you will need to hire a probate attorney who has expertise in guardianships and conservatorships. This requires a petition to be filed in probate court , have a hearing to declare your mother incapacitated and to have the judge appoint you as the guardian/conservator (this is different in all 50 states, so you need state specific legal advice, as well as you will need to be a resident of the same State as your parent.) This will be the only way for you to transact business with your mother’s accounts. You will be in a fiduciary capacity (just as an agent under a durable power of attorney is) and must act in your parent’s best interest and report to the court at least annually.

Chris Cooper is the owner and founder of Chris Cooper & Company, Inc., a fee-only financial planning firm for elderly persons and the owner and founder of ElderCare Advocates, Inc. a private geriatric care management and long term care consulting firm. As a California Licensed Professional Fiduciary, Chris can serve as  Conservator of the Person and Estate under court appointment,  as Agent under a Durable Power of Attorney for Financial matters and Health Care matters.

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