What to do if your bank refuses your power of attorney

When processing paperwork for your family member or friend in need, few circumstances become more frustrating than finding a bank, financial institution, insurance company or government office that refuses to accept your paperwork due to some previously unrecognized flaw.

High on the list of refusals may be refusal to accept a validly executed power of attorney. What can be exceptionally upsetting is the fact that many times resort is made to use of a power of attorney only after the person who gave it is unable to act on his own. Here are some ideas.

Powers of Attorney in Pennsylvania and other states generally require certain specific wording. For instance, the notice page in Pennsylvania must contain the exact wording from the statute. The same is true of the acknowledgement pages. If you or the person who gave you the power of attorney pulled a form off the Internet it may or may not conform to the requirements under the statute. This may be one good reason to get one through an attorney familiar with elder law and estates.

Read the power of attorney and be sure you understand what powers are given and which ones are not. Some of the older powers of attorney especially and some today indicate they do not take effect unless doctors certify the person who gave it is unable to act. This adds another step and might be difficult to obtain especially in an emergency. Our office advises that, if there is hesitancy to trust the person receiving the power of attorney to act on your behalf you should not give her the power of attorney in the first place. We ask the question “could you pass your checkbook across the table and be certain that person will act in your best interest?” If you can then and if your agent understands when and how to act then the second step should be unnecessary. Returning to the issue of acceptance of the power of attorney, if the second step — that is doctor certification — is required, it can take longer to get the power of attorney accepted by banks, financial institutions and other organizations and they might not want to accept it at all.

Note what powers are given under the power of attorney. Not all powers of attorney are the same. If the power is not given in the document it might be difficult to enforce at a later date.

If the document can be resigned correctly and the person who gave the power of attorney is still available, rather than argue you might have a new power of attorney prepared. These issues might not be as much of a problem but if the person is now unable to sign or understand the document, as when he or she is suffering from dementia, this may be a major issue.

Rather than argue with a bank regarding the validity of a power of attorney it may make sense to have on hand both the general financial power of attorney

prepared by the person’s attorney as well as that bank or financial institution’s own standard form. This is not because the law requires it but rather because the representative to whom you are speaking is accustomed to using their own form that has been cycled through their legal department. Sometimes it is worth it to fight the bank or financial institution’s decisions and sometimes not.

Some banks and financial institutions may, for instance, refuse a power of attorney that requires more than one agent to act together or that otherwise does not fit their standards. Should a refusal to accept the document be fought? As usual the answer is “it depends.”

If you cannot go back and make changes where there is an emergency or the person who signed the power of attorney

cannot act, then it can make sense to fight the decision. There is provision in the law, specifically Act 95, covering that. In the meanwhile if you are not sure whether your power would be accepted by your bank, this may be time to check and again review the language and formatting with your estate planning or elder law attorney to make sure it fits current standards.

Janet Colliton, Esq. is a Certified Elder Law Attorney and limits her practice to elder law, retirement, life care, special needs, and estate planning and administration with offices at 790 East Market St., Ste. 250, West Chester, 610-436-6674, colliton@ collitonlaw.com. She is a member of the National Academy of Elder Law Attorneys and, with Jeffrey Jones, CSA, cofounder of Life Transition Services, LLC, a service for families with long term care needs.