Long Island, NY POA and Estate Planning Attorney
To help look out for an aging loved one, you did your due diligence and got a Power of Attorney (POA) form. You filled it out according to the instructions, had your loved one sign it, and you were ready to take on your duties (when the time came). Now that your loved one is incapacitated and it is time for you to exercise your POA, you have realized that the financial institutions at which your loved one keeps his or her money are refusing your access. You have the financial POA in your hands and it has even been signed, but the bank still refuses to honor it. What do you do next?
Unfortunately, this is an all too common issue in the United States. When people opt for DIY elder planning, they often find that the work they have done is unusable, which leaves their loved ones in a dire situation.
Three Reasons Why Your Bank Can Reject the Power of Attorney
It is important to decode the reasons behind the refusal, but also may be in your best interest to contact an attorney before this ever happens. Three reasons why a financial situation will reject a power of attorney include:
- It is not a durable power of attorney. A power of attorney must be “durable.” If it is not durable, then it is only valid while the “principal” (the individual who signed the document) is competent. Once he or she is not of sound mind, the effectiveness of the POA is no longer valid. Durable POAs continue even after incapacitation.
- The POA hasn’t been activated. A power of attorney could be “springing.” This means that the POA is only effective when the principal is incapacitated. Incapacitation must be proven in accordance with the POA – which typically requires that a physician examines the principal and has determined that he or she is medically unable to manage the affairs because of mental incapacity, or for another reason. In this instance, the bank will need the documentation from the physician before it can honor the POA.
- The power of attorney is too old. Even after you have done everything correctly, the financial institution may not recognize you as the agent if the document is deemed “too old.” In order for a POA to be considered too old, the principal must have revoked the power of attorney or created a newly signed document that replaces the old one. This is why it is always good to update a POA by signing a new one and not having any POA longer than five years old without revisiting it.
Handing POA Issues – Contact an Attorney
If you have a DIY or attorney-prepared POA that is not being honored, contact an estate planning attorney in Long Island, NY. An attorney can help identify the reasons why the POA is being rejected, and possibly rectify those reasons. Also, if the bank is acting unreasonably, an attorney can help resolve the issues and help the individual gain access to the principal’s accounts.