Ensure Your Documentation is Up to Date Before You Need It

Refusal of Older Documentation

A client called last Friday from the lobby of a bank in a bit of a panic. His mother had a mild stroke a month or so earlier. She was staying at a rehabilitation facility. The facility was locked down due to COVID 19, no visitors, no exceptions. Mom paid all her bills the old-fashioned way with checks and stamps. Her son, standing in the bank lobby was trying to get someone to give him access to her accounts. The mortgage payment was due, and the electricity bill was already late.

Five years earlier the family had done estate planning for mom. One of the documents we created for them was a Power of Attorney. This document is exactly what the son showed the bank officer. It specifically gave him the power to access mom’s accounts in the event of a problem. The bank wouldn’t take it. They have an internal bank policy about not accepting Powers of Attorney more than a year old.

Avoidance of Legal Battles

I explained to my client on the phone that there is nothing legally wrong with the document. It is completely enforceable, however, if the bank refuses to honor it then the only way to force them is in court. This isn’t what the client or his mother had in mind.

After a bit of discussion, my client put me on the telephone with the branch manager at the bank. Fortunately, this was a local bank and I was able to assure the manager that the family had been clients of mine for many years and that the Power of Attorney was perfectly valid and enforceable. I did not need to threaten the manager with a lawsuit, but I did casually point out that he need not worry, any court would find it fully enforceable. He understood and granted my client access to the accounts.

Documentation Policies Expanding

After this event, I checked with a few other financial institutions. It appears that the policy of requiring “current” powers of attorney is more and more prevalent. Virtually all of our estate planning clients have powers of attorney. They are a part of any decent plan. It is not unusual, however, that years pass before they are needed. While still perfectly valid, it doesn’t mean every institution will be comfortable with a five-year-old document. More than ever, this is a good time to make sure everything is up to date.

If you have questions about a Power of Attorney, then call or email Legacy Trust and Wills. While the crisis continues, our attorneys are offering free, fifteen-minute, telephone consultations that may set your mind at ease.