Law Offices of Roshni T. Desai
Long-term Planning For Orange County

Why banks may reject a power of attorney

It seems that everything is set in place for your estate. You have signed up a competent and trusted individual to assume power of attorney in the event you are disabled and can no longer make plans for your estate. But what if the person with your assigned power of attorney goes to your California bank to handle an issue with your account only to be turned away? Unfortunately, finanical institutions rejecting people with power of attorney is a real scenario that people are experiencing to their confusion and frustration.

According to The New York Times, a person with a power of attorney for an older relative went to a bank ready to consolidate the relative’s accounts only to be turned away. The bank required the original account holder to sign a longer state form than the holder had signed three years ago. However, the older relative had since developed dementia and was no longer fit to sign new paperwork. The New York Times piece points out that many banks and financial institutions require their own forms to be signed for power of attorney to be recognized, but in some cases, the original account holders at these institutions were too incapacitated to sign new forms.

Sometimes power of attorney forms at a bank may have a time limit. A piece in Forbes points out that some institutions will not recognize a power of attorney agreement that is too old. A bank, for example, may reject a power of attorney form that was signed more than six months ago. These institutions may require the person who assigned the original power of attorney to reaffirm the form at particular intervals if the power of attorney has not been used.

Verifying the identity of someone claiming to have power of attorney is also an issue. Banks, firms and financial institutions will have their particular standards for identification. Depending on the institution, a driver’s license may be sufficient, while other institutions may insist on additional forms of identification. The best course of action is to acquire a list of all required identification methods before assigning a power of attorney, as well as timetables for how long power of attorney forms will last before they must be renewed. 

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