Financial Institutions Refused to Honor Her Power of Attorney

[Beststash]

Not sure if this has been discussed but it caught my attention. I wonder how common this is?

https://www.aarp.org/caregiving/financial-legal/info-2023/why-banks-refuse-poa.html

What can you do when a money manager won't accept an essential estate planning document? Kristen McDermott of Fryeburg, Maine, needed an answer. McDermott, 58, a professional gardener, told me she had power of attorney (POA) for her mother, Leslie Kremer, 85, who has dementia. Kremer’s bank and former employer honored that POA, which Kremer granted 14 years ago giving McDermott legal authority to manage her mother’s finances.

But two financial companies — Vanguard and USAA — wouldn’t let McDermott act for her mother. She had called, supplied documents, called again — and gotten nowhere.

(snip)

First, let’s clarify: Powers of attorney aren’t all the same:

A general POA allows a designated person to handle all financial matters on your behalf.
A special or limited POA is for a specific purpose, such as having someone sign for you at a real estate closing.
A durable POA is in force at all times.
A non*durable POA ends if you become incapacitated or disabled.
A so-called springing POA goes into effect only if you become incapacitated.

McDermott had a durable POA, so she thought she was set.

(snip)

Vanguard’s version of a POA is called the Vanguard Agent Authorization form, which the company says was designed to be valid in the face of state-by-state variations in POA laws. Presumably, if Kremer had found it among the various forms on Vanguard’s site, filled it out and submitted it prior to the onset of her dementia, McDermott would now be able to access her mother’s account.

(snip)

 

[njhowie]

Easiest way to deal with this - just use mom's online account. Mom doesn't have an online account? Go and create it. Once it's created, you are mom for all intents and purposes. Does Vanguard or USAA know? Nope. Are you doing something illegal that will get you in trouble? Nope - you have the durable POA and mom's blessing.

Doing this facilitated a lot of things in the end with mom. Was I ever questioned about anything? Nope. I had financial and medical POA. Any time I needed to do anything with anyone on mom's behalf, all I did was give them a copy of the POA document and then I had no trouble doing anything on mom's behalf. I never ran in to anyone that gave me a hassle. I also had mom's login for all of her investment/financial accounts - along with her blessing to do whatever I wanted/needed to do.

It is so ridiculous that folks try to do the right thing and then these institutions don't want to honor legal documents. So, just use their platform to do what you need to...and are authorized to do. What's the worst that they'll do? Nothing - because they have no way of knowing.

 

[MichaelB]

Strange, because both Vanguard and USAA accepted my mum’s durable POA

Easiest way to deal with this - just use mom's online account. Mom doesn't have an online account? Go and create it. Once it's created, you are mom for all intents and purposes. Does Vanguard or USAA know? Nope. Are you doing something illegal that will get you in trouble? Nope - you have the durable POA and mom's blessing.

Doing this facilitated a lot of things in the end with mom. Was I ever questioned about anything? Nope. I had financial and medical POA. Any time I needed to do anything with anyone on mom's behalf, all I did was give them a copy of the POA document and then I had no trouble doing anything on mom's behalf. I never ran in to anyone that gave me a hassle. I also had mom's login for all of her investment/financial accounts - along with her blessing to do whatever I wanted/needed to do.

It is so ridiculous that folks try to do the right thing and then these institutions don't want to honor legal documents. So, just use their platform to do what you need to...and are authorized to do. What's the worst that they'll do? Nothing - because they have no way of knowing.

Vanguard also has a feature where the account owner can log in and designate someone else to access the account and make transfers, trades, etc. It’s very convenient.

 

[njhowie]

Strange, because both Vanguard and USAA accepted my mum’s durable POA



Vanguard also has a feature where the account owner can log in and designate someone else to access the account and make transfers, trades, etc. It’s very convenient.

Yes, Fidelity as well. However, at least in Fidelity's model there are some things which you can't get to through that - accessing statements and tax documents for instance.

 

[pb4uski]

... It is so ridiculous that folks try to do the right thing and then these institutions don't want to honor legal documents. So, just use their platform to do what you need to...and are authorized to do. What's the worst that they'll do? Nothing - because they have no way of knowing.

+1 I had no guilt at all using login credentials that I established for my Mom's accounts since I had POA, was a co-trustee for some accounts, etc. if some vendor was being an A$$hat about allowing me access. I even has some similar issues as a court-appointed guardian. It's ridiculous.

I think it is shameful that some financial institutions will not accept a valid POA unless it is on their form. There really ought to be a law against that.

The thing that I was p-o'd about most recently is that when we notified Schwab that my mom had died that we had no access, not even read-only access, to her IRA accounts. They no longer showed up on my dashboard even though I had trading authority on them. Her login no longer worked either. I can see them freezing the accounts from any changes or trading, but not even read only? It was ridiculous. I had a large brokered CD mature after she died and couldn't even get them to move the proceeds from the settlement account to SWVXX.

 

[njhowie]

The thing that I was p-o'd about most recently is that when we notified Schwab that my mom had died that we had no access, not even read-only access, to her IRA accounts. They no longer showed up on my dashboard even though I had trading authority on them. Her login no longer worked either. I can see them freezing the accounts from any changes or trading, but not even read only? It was ridiculous. I had a large brokered CD mature after she died and couldn't even get them to move the proceeds from the settlement account to SWVXX.

Almost the same with Fidelity. I was still able to see her account holdings through the linkage to my account. That facilitated things as I was working with them to distribute mom's assets between me and sis (50/50 beneficiaries), so I could see what they had done, where they were in the process, and anything they did incorrectly.

Before I told Fidelity that mom had died, I downloaded copies of everything...statements for the past year, current holdings, made sure all of the accounts had the beneficiaries properly set up, and anything else that needed to be taken care of. Sure enough, almost immediately after I did the online notification of her passing, it was all locked up.

 

[pb4uski]

Almost the same with Fidelity. I was still able to see her account holdings through the linkage to my account. That facilitated things as I was working with them to distribute mom's assets between me and sis (50/50 beneficiaries), so I could see what they had done, where they were in the process, and anything they did incorrectly.

Before I told Fidelity that mom had died, I downloaded copies of everything...statements for the past year, current holdings, made sure all of the accounts had the beneficiaries properly set up, and anything else that needed to be taken care of. Sure enough, almost immediately after I did the online notification of her passing, it was all locked up.

Yeah, I did the same. Checked to make sure the beneficiaries information was correct and downloaded all positions.

To be clear it was just her IRAs that fell off the face of the earth... the trust accounts I still have access to.

 

[Beststash]

It got my attention because we have 2 POAs for my 92yo MIL. One is just labeled a POA and the other a Medical POA - both are notarized. The Medical one is considered a type of durable POA but not sure what the other is? I think it might just be a duplicate of the Medical because it has the following Statement -

"Know all men by these presents, that I, XXX XXXX, of said State and County, have made, constituted and appointed my daughter, XXX XXXX, my true and lawful attorney for me and in my name, place and stead, in the event that I, XXX XXXX, should become incapacitated and unable to conduct the personal, legal, and financial affairs for myself."

Highlighted - seems to indicate to me just medical circumstances?

 

[pb4uski]

No, I think that is a broadbased POA but is a springing POA... it springs into action and becomes operative only if the subject becomes incapacitated.

But if you go to use it what proof will you need to provide that the POA has indeed sprung?

 

[RetMD21]

Easiest way to deal with this - just use mom's online account. Mom doesn't have an online account? Go and create it. Once it's created, you are mom for all intents and purposes. Does Vanguard or USAA know? Nope. Are you doing something illegal that will get you in trouble? Nope - you have the durable POA and mom's blessing.
......

That's the expedient thing to do. A lot of institutions like their own forms and don't seem to want to look at outside documents. I found online access using the borrowed login to be easiest despite having my own credentials.

 

[Beststash]

No, I think that is a broadbased POA but is a springing POA... it springs into action and becomes operative only if the subject becomes incapacitated.

But if you go to use it what proof will you need to provide that the POA has indeed sprung?

Thanks - The other POA I mentioned as "Medical" is actually labeled ADVANCED DIRECTIVE and MEDICAL POWER OF ATTORNEY - with two subheadings -

LIFE SUSTAINING TREATMENT - with details such as "Terminal condition" and "Irreversible condition"

DIRECTIVE TO PHYSICIANS - which deals with artificially prolonging life in 6 distinct circumstances.

Maybe the purpose being to provide the circumstances to spring the POA?

Not sure she will remember the details of having these done but I'll ask.

I don't think it would be that complicated because we have already consolidated her financial and asset issues into our custody.

 

[athena53]

This happened at Fidelity when Dad was in his last months. Dad had done everything right with POAs- except apparently they weren't on Fidelity's forms. Two of my brothers (a tax accountant and a cost accountant) had a POA that went into effect if Dad was failing mentally; Fidelity wouldn't allow them full access to the accounts until they had medical people at the LTC facility fill out THEIR (Fidelity) forms saying Dad had lost his marbles. It was very hard on my brothers.

I'm re-visiting my estate plan after the first of the year and I'm not sure how to get around this although I hope I have many good years ahead. I have my accounts at 3 institutions, and don't want to consolidate them. Sure, I can get their preferred POA forms executed now but do I need to chase after them every year to see if they've been revised, execute new ones and get them notarized again? What a pain.

 

[Dtail]

Interesting topic.
For Ally Bank, many times I called as my dad not to mention that my mom who is still alive has a name that is not clearly gender based, so she is effectively a male when I call.
I have all the logins for my brother and mom, except she doesn't have a Fidelity one yet.
Had a very involved conversation with Fidelity, filled out a comprehensive form with notary signatures for both of us just to get a linked bank account for me to use. Then they tell me I can only push from the bank side but only with a wire transfer. Screw that.
She is going to get a login and I will go from there. They know effectively I will do this, but nothing they can do about it.

 

[GrayHare]

A Trust can help with this issue, giving all Trustees legal access to accounts.

 

[pb4uski]

^^^ True, but there are still IRAs and such that can be a problem.

 

[Morgan22]

This happened at Fidelity when Dad was in his last months. Dad had done everything right with POAs- except apparently they weren't on Fidelity's forms. Two of my brothers (a tax accountant and a cost accountant) had a POA that went into effect if Dad was failing mentally; Fidelity wouldn't allow them full access to the accounts until they had medical people at the LTC facility fill out THEIR (Fidelity) forms saying Dad had lost his marbles. It was very hard on my brothers.

I'm re-visiting my estate plan after the first of the year and I'm not sure how to get around this although I hope I have many good years ahead. I have my accounts at 3 institutions, and don't want to consolidate them. Sure, I can get their preferred POA forms executed now but do I need to chase after them every year to see if they've been revised, execute new ones and get them notarized again? What a pain.

Your Dad's POA sounds like a springing POA. With this type its normal to have to have to get doc's to declare the person incapacitated.

If you want to avoid this for your kid(s), you need to set up a different type of POA.

 

[nwsteve]

A Trust can help with this issue, giving all Trustees legal access to accounts.

Don't disagree a trust should help--HOWEVER, banks demonstrated similar behavior when we trying to transfer assets my FIL left. All the bank based assets were pod except a small checking account. His real estate was all in a Living Trust which became nonrevocable on his death. In almost every case the banks local managers disputed that they had to honor the trust or make any payout until probate was completed and we provided a probate court finding. Because we had nearly all assets in trust and pod accounts, no probate was required. Somewhere in their training it had been branded in their banker minds, no probate order never release assets

 

[Ncc1701]

The thing that I was p-o'd about most recently is that when we notified Schwab that my mom had died that we had no access, not even read-only access, to her IRA accounts. They no longer showed up on my dashboard even though I had trading authority on them. Her login no longer worked either. I can see them freezing the accounts from any changes or trading, but not even read only? It was ridiculous. I had a large brokered CD mature after she died and couldn't even get them to move the proceeds from the settlement account to SWVXX.

You should never expect to be able to transact in a deceased person's account. A POA ceases upon death of the account holder. Period. You no longer have authority. In order to regain authority, show up with the Letters of Testamentary, Get a tax ID # for the Estate and open an estate account. Then you can do as you wish with the assets. Or if you're a TOD beneficiary, provide a letter of instructions and an account application if you don't have an account. You can't expect financial institutions to break the law.

 

[FREE866]

This is an interesting thread.


My mom has 2 accounts at Schwab. I am Full POA and it is noted on the Schwab account that I see stating my role under the "account access" tab. Each of her accounts have designated beneficiaries.


Are you guys saying that i will run into issues once she passes?


Should I be getting some additional documentation while she is still alive?

 

[Ncc1701]

This is an interesting thread.


My mom has 2 accounts at Schwab. I am Full POA and it is noted on the Schwab account that I see stating my role under the "account access" tab. Each of her accounts have designated beneficiaries.


Are you guys saying that i will run into issues once she passes?


Should I be getting some additional documentation while she is still alive?

You will have zero issues when she passes. You will be immediately removed from her accounts and when you obtain the proper documents, you will have authority again. Its a very efficient process and a Schwab Estate specialist will walk you through it.

 

[pb4uski]

... The thing that I was p-o'd about most recently is that when we notified Schwab that my mom had died that we had no access, not even read-only access, to her IRA accounts. They no longer showed up on my dashboard even though I had trading authority on them. Her login no longer worked either. I can see them freezing the accounts from any changes or trading, but not even read only? It was ridiculous. I had a large brokered CD mature after she died and couldn't even get them to move the proceeds from the settlement account to SWVXX.

You should never expect to be able to transact in a deceased person's account. A POA ceases upon death of the account holder. Period. You no longer have authority. In order to regain authority, show up with the Letters of Testamentary, Get a tax ID # for the Estate and open an estate account. Then you can do as you wish with the assets. Or if you're a TOD beneficiary, provide a letter of instructions and an account application if you don't have an account. You can't expect financial institutions to break the law.

No ****, Sherlock. I never said that I expected to be able to transact in a deceased person's account. In fact, I said that I only expected read-only access and was p-o'd that it was just erased from my dashboard as if it never existed. Allowing me continued read only access doesn't break the law, so smarten up.

These were IRAs with beneficiary designations and I specifically indicated that, so there was no need for an estate tax ID, and estate account, probate or anything like that... so I'm not sure you really have an idea what you are talking about.

 

[FREE866]

You will have zero issues when she passes. You will be immediately removed from her accounts and when you obtain the proper documents, you will have authority again. Its a very efficient process and a Schwab Estate specialist will walk you through it.

Thx


do you work at schwab?


That was an uber professional response to my concern

 

[pb4uski]

Don't disagree a trust should help--HOWEVER, banks demonstrated similar behavior when we trying to transfer assets my FIL left. All the bank based assets were pod except a small checking account. His real estate was all in a Living Trust which became nonrevocable on his death. In almost every case the banks local managers disputed that they had to honor the trust or make any payout until probate was completed and we provided a probate court finding. Because we had nearly all assets in trust and pod accounts, no probate was required. Somewhere in their training it had been branded in their banker minds, no probate order never release assets

You need smarter bankers... at least banker who would know that probate doesn't apply to POD or trusts (or living trusts anyway).

 

[Ncc1701]

Thx


do you work at schwab?


That was an uber professional response to my concern

Haha...I spent the best 11 years of my career as a Financial Consultant at a Schwab branch....

 

[Ncc1701]

No ****, Sherlock. In fact, I said that I only expected read-only access and was p-o'd that it was just erased from my dashboard as if it never existed. Allowing me continued read only access doesn't break the law.

Uh yeah. It does.