When you have been appointed as an agent under a Durable General (Financial) Power of Attorney, you presume that financial institutions will honor the document appointing you and provide you with access to funds and financial information on behalf of the person who appointed you as agent. It can be a frustrating experience to be told that you cannot access accounts or get the information you are seeking. To resolve the problem, it is important to ask for a clear explanation for why the document is not acceptable. There are some common reasons for a bank, financial institution or other agency to refuse to acknowledge the power of attorney.
1.) The Power of Attorney Is Not Durable
Read the document carefully. For a power of attorney to be effective after incapacity, it must contain specific language indicating that the power of attorney is “durable,” meaning it continues to be effective after the principal becomes incapacitated. Otherwise, it is only effective while the principal is still of sound mind. Since most individuals want the power of attorney to be effective in the event they are no longer able to handle their financial affairs, they should be sure that the power of attorney contains the appropriate durable language when it is drafted. If there is no such language, the agent has no authority and a bank will not honor the power of attorney. If the principal is already incapacitated, they will not be able to execute a new power of attorney and a guardianship may be necessary to access accounts and financial information.
2.) The Power of Attorney Has Not Been Activated
Most Durable General (Financial) Powers of Attorney contain language about how they become effective, again it is important to read the document very carefully before you need to use it, so you can determine what must occur for it to become activated. Some powers of attorney contain language indicating they are “springing,” meaning they only become effective upon the incapacitation of the principal. Some indicate that the document becomes effective after the principal signs a written statement indicating it is effective and they want the agent to act for them. Other powers of attorney are effective immediately the day they are executed, meaning the principal does not have to be incapacitated for the agent to use the document to act on their behalf.
3.) You Have Not Provided Required Documentation
If the power of attorney requires incapacitation before it is effective, you must provide documentation to the bank or financial institution showing that incapacitation has occurred. You may need medical records or a statement from a physician; or if the document requires it, the signature of two physicians who have examined the principal and determined that he or she is unable to manage their affairs due to mental incapacity. If the document requires a written statement from the principal, you must present that document, along with the power of attorney. If you are a secondary agent, named to act in the event the primary agent is unwilling to act or is unable to act due to death or incapacitation, you must provide documentation as to why the first named agent is not acting (e.g. a written resignation, death certificate or certificate showing the first agent has become incapacitated).
4.) The POA Is “Stale”
The notion of “staleness” implies that if a power of attorney was executed a number of years ago, then there is a chance the principal may have revoked the power or has executed a new one. In Wisconsin, a person may not refuse a power of attorney based on the date it was executed; however, a person may ask for a certification of the power of attorney which provides that the principal is still alive, has not revoked or amended the power of attorney and that the contingency requiring it to be effective has occurred.
5.) Handling Power of Attorney Issues with Banks
Keep in mind that banks and other financial institutions are often trying to prevent fraudulent transactions, giving access to an unauthorized person or granting access to an authorized person under the wrong circumstances. They want to protect their customers and can be held liable for granting unauthorized access. While this can be frustrating for the agent, try to remember that you would want the utmost caution taken if someone were trying to access your personal information or accounts.
Remember, if you have communicated clearly and have provided all documentation without successfully accessing the needed information, your attorney may be helpful in providing the bank or financial institution with the legal authority necessary to access the information.