
By
Atty. Brandon C. Walecka, Esq., LL.M.
Q&A Series is a collection of frequently asked questions that we often hear from clients. It provides brief answers to many common questions about estate planning, Medicaid planning, special needs planning and other elder law issues. Interested in learning more? Search "Q&A".
What if the bank won't accept the power of attorney?
Sometimes we get a call from a client who says, "I'm at the bank and they won't accept my mother's power of attorney. What can be done?"
First, what is a Durable Power of Attorney (DPOA)? This is a legal document in which you designate who you want to make legal and financial decisions for you if you cannot make them for yourself. For example, who will pay your bills or withdraw funds from your bank accounts if you cannot do it for yourself? "Durable" means that the power of attorney will survive the incapacity of the principal (the person who created the power of attorney).
Even a validly executed DPOA can be rejected or called into question by a third party. Banks, brokerage firms, insurance companies, and other financial institutions sometimes raise objections when presented with a DPOA by the named agent (e.g. your spouse or child). The institution may demand proof that the DPOA is still valid or complain that the power of attorney is "stale". When a financial institution says a DPOA is stale, they are claiming that it was executed too long ago and the bank questions whether it is still your intent for the agent to act on your behalf. In some situations, you may need to decide whether it is worth fighting them over this.
If you have a DPOA from our firm, our document explicitly addresses the issue of "staleness" by stating in the document that "This power of attorney is not affected by the passage of time." Additionally, Massachusetts law states, "the power [of the agent] is exercisable notwithstanding the lapse of time since the execution of the instrument." Also, our DPOA states that third parties (banks or financial institutions) may rely upon the representations of the attorney-in-fact that he or she has the authority to act. This is further supported by Massachusetts law which gives the agent authority to prosecute legal action for damages in the event of an unreasonable refusal of the bank to honor the authority of a valid durable power of attorney. This should ensure that when you need your agent to act on your behalf, he or she will be able to.
What does this mean for you?
Do you want to have piece of mind that your basic estate planning documents, which include your DPOA, will work when you need them? Changes happen and we want to make sure your estate plan continues to do what you intended it to do. Reviewing your estate plan will give you peace of mind. That is why at Surprenant & Beneski, P.C., if you are a client of ours, every three years, we invite you back in for a FREE Three-Year Review. At the thirty minute meeting, our elder law attorneys will review your existing documents, suggest new or updated documents (if necessary), address changes in your life, and help to ensure that what you have in place will work when it needs to in the future.
Reviewing your estate plan will not only give you peace of mind, but it will also alert you to any law changes that have happened since you established the documents. Estate planning is sometimes affected by changes at the state and federal level.
If you are a client and you think it has been some time since you have reviewed your estate plan, consider calling Surprenant & Beneski, P.C. to see if you are entitled to your free thirty minute review with one of our elder law attorneys today.
©Surprenant & Beneski, P.C. 35 Arnold Street, New Bedford, MA 02740, 336 South Street, Hyannis MA 02601 and 1265 Belmont Street, Suite 2, Brockton, MA 02301. This article is for illustration purposes only. This handout does not constitute legal advice. There is no attorney/client relationship created with Surprenant & Beneski, P.C. by this article. Do Not make decisions based upon information in this handout. Every family is unique and legal advice can only be given after an individual consultation with an elder law attorney. Any decisions made without proper legal advice may cause significant legal and financial problems.