Will your bank accept your Durable POA?

[SteveL]

Over the last year or so I have been handling my in-laws financial affairs as their Trustee and Power-of-Attorney. Most of us have wills, and good lawyers will usually do a durable POA along with a will. Then, if you get hurt or disabled, the person you appointed as your POA can contact the institutions you do business with, and continue to pay your bills etc. My in-laws were doing business with more than 30 such institutions. (Something I changed) My father-in-law was always chasing higher yields, often on the internet.
Some of these institutions made it difficult or impossible for me to get access to their funds. One bank, absolutely refused to honor the POA, saying we don't accept them. I asked what they expected a customer to do in the event of disability. This bank Customer Rep. advised bringing a lawsuit.....Other banks spent lots of time quibbling about the phrasing. I had to spend several thousand dollars having our attorney write letters explaining the POA.
Another problematic area with the same issues is the Living Trust. This is a great invention, but a lot of work for the successor trustee.
Most folks have their spouse as the person on the POA. Unless your spouse is much more into finance stuff than mine, I cannot imagine her dealing with these problems.

 

[Brat]

My family uses revocable living trusts to avoid the POA problems. Both my husband and I have parents who became incompetent in the last years of their lives. When you are doing your best to manage their care the last thing you need is grief from a bank!!

 

[Martha]

I work with a number of banks and have had no trouble with POAs provided the standard form (generally preprinted) approved by a specific state is used.

 

[BUM]

Another problematic area with the same issues is the Living Trust. This is a great invention, but a lot of work for the successor trustee.

Hi SteveL,

Amen brother. Being a trustee is a lot of and thats if nothing goes wrong! I was a sole trustee for over 10 years. For the most part it was a thankless job. Do you have other trustees named just in case you can't perform?

 

[FlowGirl]

As a military spouse, this issue comes up all of the time among my circle of friends. Have heard a lot of stories about POAs not being accepted. It can be a big pain.

 

[Brat]

How does the amount of work for a trustee paying the bills of the grantor of a RLT differ than that which would be done otherwise?

 

[grumpy]

I posted on a similar topic some time ago:

http://early-retirement.org/forums/index.php?topic=1695.msg26095#msg26095

The mere existence of a RLT and POA is no guarantee of a smooth transition.

Grumpy

 

[Mr._johngalt]

MY folks are fading. We have attorney drawn wills, living wills,
health care POAs and Financial POAs. None have been tested as yet
but will be soon I am sure. My folks are unable to provide even the
most basic financial information (copies of tax returns, sources/amounts of income). This means I must search their home and/or reconstruct everything in some way. No fun!

JG

 

[Brat]

Download an IRS POA asap and have each sign one.

They do not accept regular POAs (been there, tried that)!

 

[dbr]

And while you are dealing with the IRS pay a visit to your friendly state department of revenue and to the Social Security Administration, among others. Also consider the ownership of homes, cars, etc. There is more to actually using a POA than just waving it around and everybody bows down. For example, you should see how hard it can be to get the local cable company to discontinue service to an incompentent individual just based on the say so of the family -- something about federal privacy act. . .

Devices such as revocable trusts, putting services from banking to telephones in joint or your own name well in advance, etc. can be very helpful.

 

[Brat]

Thanks dbr.  I know some of the problems folks have had with aging family members are situation specific, but having a RLT is much better than trying to manage with just a POA.  Martha, I know that a POA should be sufficient but some orgs just don't want to go there.  When we have our hands full with the usual day to day stuff some of us don't have the energy to argue it out.

dbr:

For example, you should see how hard it can be to get the local cable company to discontinue service to an incompentent individual just based on the say so of the family -- something about federal privacy act. . .

Had to deal with that too - just to change the channel options!

 

[BUM]

Just like the IRS I found that the bank would "strongly prefer" I completed their POA form. A pain in the butt. Got it done and things got easier after that.

JG,
Its tough when you have to discover where the assets and liabilities are. The incoming mail might be your only source. It could be easier if all their mail was forwarded to you. You probably thought of that. The old folks dont like to give up their mail. Some insurance statements are sent annually.

 

[Martha]

I know that sometimes arguments come out of trying to use POAs. But not everyone wants to do a trust for one reason or another. Also, people aren't always very good about making sure all their assets are in the trust.

Like we talked about a while ago, it might be good to have a health care directive, but it doesn't mean the hospital is going to follow it.

Brat, good catch about the IRS POA form. They even make attorneys cough up that form before they will talk to you.

 

[Brat]

I agree Martha, there are some who aren't comfortable with trusts because they don't understand them or control concerns.  A POA, to me, is the ultimate loss of control.

Yes, sometimes health care facilities disregard health care directives, that is when a health care power of attorney should be exercised.

WARNING on IRS POA's, they have a lifespan.  Consider not entering the date until you need to start exercising it.  IMHO, if I prepare, pay and submit a tax return with on behalf of a parent because they cannot, all IRS can do is say they don't like it.  They would have a tough time doing much about it.

FYI, I am not an attorney so my comments are based only on my experiance.

 

[Ed_The_Gypsy]

POA doesn't do everything.

My folks signed a power of attorney but ALSO had drawn up Instructions to Physicians that expressed their desires as to "no heroic measures". You have to find out what the local quacks accept. Check regularly, as they change their minds and circumstances change, too.

My wife's family has used Revocable Living Trusts with success after one unpleasant experience.

In my family, there was no problem among us, their heirs. My folks simply had their accounts lableled POD (payable on death) to each other and later to my sister, who was the executor. Very simple and no problems.

Ed

 

[Mr._johngalt]

POA doesn't do everything.

My folks signed a power of attorney but ALSO had drawn up Instructions to Physicians that expressed their desires as to "no heroic measures".  You have to find out what the local quacks accept.  Check regularly, as they change their minds and circumstances change, too.

My wife's family has used Revocable Living Trusts with success after one unpleasant experience.

In my family, there was no problem among us, their heirs.  My folks simply had their accounts lableled POD (payable on death) to each other and later to my sister, who was the executor.  Very simple and no problems.

Ed

I have decided I have done about all I can for now. After one of my parents passes, that will be the trigger to dive back in and
do a "gut check". Besides, all kinds of things can change. I am good
at this stuff, but I hate to be doing it over and over ad nauseum.

JG