Power of attorney problems with banks typically arise when banks reject a power of attorney (POA). This can cause significant challenges for the agent granted power through the POA and often leads to unwanted (and unnecessary) legal expenses.
When dealing with reasonable financial institutions that are familiar with POAs, most problems can be quickly overcome. But there are important steps you’ll need to consider.
In this article, we’ll discuss some unique challenges below and the most common questions we receive about PoAs. Feel free to jump ahead to the section that is most relevant to you.
Table of Contents
- What Financial Power Does a POA Provide?
- Can a POA Withdraw Money From a Bank Account?
- Can a Power of Attorney Close a Bank Account?
- Can a POA Use a Debit Card?
- How Long Does it Take for a Bank to Approve a Power of Attorney?
- How Can You Reduce the Potential for Power of Attorney Problems With Banks?
- What Are The Disadvantages of Power of Attorney?
- How Can You Get the Most From Your Legal Planning?
What Financial Power Does a POA Provide?
The financial power granted by a POA will depend on the specific authority given to your agent in the document. For example, the POA can give general power without any limitations, which would allow the agent named in the document to do anything that you could do yourself (e.g take any action that is considered legal).
Needless to say, it’s important to be clear on your goals before signing a POA and to make sure you’re handing over the authority that you originally intended. If you only want an agent to have limited authority over a specific account, this needs to be correctly documented ahead of time.
Of course, if the agent granted power through the POA is not acting in good faith, it’s possible for family members to try and step in. This would involve the family challenging the assigned agent in court. If the court were to side with the family, they would revoke the POA and assign another party.
Frequently Asked POA Questions
Here are a few common questions we receive about the power granted by a POA. As mentioned above, the answer ultimately depends on the authority given to your agent in the document.
Can a POA Withdraw Money From a Bank Account?
Yes, if an agent is granted power through a general POA without limitation, they can withdraw money from a bank account.
Can a Power of Attorney Close a Bank Account?
Yes, if an agent is granted power through a general POA without limitation, they can close a bank account.
Can a POA Use a Debit Card?
Yes, if an agent is granted power through a general POA without limitation, they can obtain a debit card.
How Long Does it Take for a Bank to Approve a Power of Attorney?
Every financial institution handles POAs differently. In some cases, the agent may be required to show up in person with certified documents or provide special letters confirming the appointment. Of course, there are also cases where banks and other financial institutions sometimes refuse to honor them completely.
For this reason, it’s impossible to give a “one-size-fits-all” answer to how long it takes for a bank to approve a POA. Instead, “it depends” is as close as you can get. But, there are things you can do to help speed up the process, which we cover below.
How Can You Reduce the Potential for Power of Attorney Problems With Banks?
There are three things that can be done to avoid problems with getting a POA approved by a bank, which are:
1. File Your POA With the Bank
Filing your POA with the bank (before it is needed) is the best way to ensure your agent doesn’t face any problems getting the POA approved. In fact, it creates an opportunity for any potential problems to be dealt with in advance. In doing so, you make sure the POA is approved and your agent will have fewer headaches later on.
2. Provide Your Agent With Accurate Information
It’s always best to prepare a complete list of relevant financial accounts for the agent ahead of time. This should include basic bank and account information for every account, including:
- Name of the financial institution
- Primary and secondary contact person
- Contact information for the contact person(s)
- Type of accounts held at the bank
- Purpose of the accounts
Obviously, everyone will have a different level of comfort when it comes to the information that they want to disclose. But, generally speaking, having this information prepared beforehand can help ensure a smooth transition.
3. Know the POA Acceptance Requirements
Certain people may not want the POA filed and approved ahead of time. If this is you, it’s important to confirm the acceptance requirements at each of your financial institutions for the agent. Additionally, if you have a private (or premier) banking relationship, you can also request that the bank notify you if the relevant policies ever change.
What Are The Disadvantages of Power of Attorney?
The biggest disadvantage of a POA is that the agent may choose to do things that are out of line with your original intention.
As mentioned above, concerned family members can petition the court to step in to remedy the situation. But not all family members will have the desire or financial means to do this.
Needless to say, it’s incredibly important that the agent being assigned is trustworthy and will carry out wishes exactly per the instructions given. Unfortunately, this isn’t always the case.
How Can You Get the Most From Your Legal Planning?
If you are looking to execute a power of attorney, it’s important that you speak with a qualified attorney to help guide you through the process. Additionally, if you have financial assets (or real assets) in multiple jurisdictions, you should ideally seek a legal advisor who is experienced in all of those jurisdictions.
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