A responsible family member executed a well-drafted and carefully thought through estate plan that included a financial power of attorney and now that family member has become incapacitated in some manner activating the POA. When the agent named under the power of attorney document approaches a financial institution to rightfully gain access to the information the agent may still run into issues. There are three main reasons that a financial institution will refuse to honor a power of attorney document. Those three reasons include:
The POA is Not Durable
If the power of attorney does not contain the required language to be considered durable then it is only valid while the principal is of sound mind. The ‘durable’ language is what allows the power of attorney to continue to be affective even after the principal becomes incapacitated.
The POA Requires Medical Proof of Incapacity
Some power of attorney documents include terms that require incapacitation to be proven by a medical professional. If a document contains this language, the bank will need to see a letter from a physician stating that the incapacity requirements have been met to activate the power of attorney.
The POA is Outdated
Many financial institutions have internal policies requiring power of attorney documents to have been executed within a certain time frame, often within the last 5 years. If the power of attorney document is much older than that, the bank may fear that a new power of attorney exists and therefore refuse to honor the terms of the one they perceive to be outdated.
If you run into one of these situations, and need legal assistance, please contact the experienced estate planning attorneys at Stouffer Legal in the Greater Baltimore area.