Power of Attorney

Durable General Power of Attorney

A durable general power of attorney equips your agent with the broad ability to make general and financial decisions for you during your lifetime. So for example, if you want to appoint a family member or friend as your agent, that person has the ability to perform the following actions:

• Write checks out of your personal account
• Pay bills
• Take out loans in your name
• Make investment decisions
• File your taxes

Can My Agent Use My Money for Their Personal Benefit?

Absolutely not. Every agent has a fiduciary duty to the person giving them that power. What that means is that a power of attorney has an obligation to make sure that any assets they possess or have access to are used only for your benefit (the principal). If the power of attorney does “self-deal”, or use the money for their benefit, it would be a breach of their fiduciary duty and they can be removed as your agent.

Remember when you choose someone to be your agent it needs to be someone you trust. Your agent has an enormous amount of power to make decisions without necessarily having your input. If you do not wholeheartedly trust the person who has power of attorney over you it may be a good idea to remove them and appoint someone else. Unfortunately, it is not uncommon that people will abuse general powers of attorney and you should be vigilant and know the person you are appointing as your agent.

Do Banks Have to Honor Powers of Attorney?

No, banks and other financial institutions do not have to accept a power of attorney. When banks decline to honor the power of attorney presented to them it can be enormously frustrating. Various excuses banks give as to why they will not accept the document range from the age of the instrument itself to insisting that the owner on the account be present and authorize the transaction. When banks and other institutions refuse to honor the durable general power of attorney here a few actions you can take:

• First, ask to speak with the manager or someone more senior in the bank itself and plead your case

• Second, speak with the attorney who prepared the power of attorney and ask them to speak with the bank

• Third, as a worst-case scenario, you may have to petition the Court for the appointment of a conservator

Perhaps the best way to ensure that the bank will accept the power of attorney is to have a good working relationship with the bank. Set up an appointment with the manager of your bank before the need for the use of the power of attorney arises. Introduce your agent to the manager so that they are familiar with that person and understand your wishes.

Remember bankers are only doing their job and must protect their customers’ assets. In many ways, you should want a bank that is strict with whom they allow access to your accounts. However, if you can establish a good relationship with your bank before the time comes to use the power of attorney, it will go a long way in eliminating issues such as these.

Update Your Power of Attorneys Every 3 to 5 Years

Durable powers of attorney are good indefinitely. They technically have no ending date. However, due to the recent rise in identity theft and abuse of power of attorneys, many banks and financial institutions will no longer accept powers of attorney greater than 3 to 5 years old. At the very least, they will question the validity of the document. Remember, a bank or financial institution does not have to accept the instrument and it is within their discretion to honor it. As such, it is a good idea to update your general power of attorney at least every 3 to 5 years just to make sure they are current.