Does Durable POA trump POA?

[48Fire]

Person A has a POA on DM's brokerage account. Five years go by. Then Person B gets a Durable POA on essentially everything for DM. DM now is basically incapable, in assisted living with advanced dementia.

Is Person A's POA now trumped by the Durable POA of Person B? Seems to me that the POA was only in affect when DM was capable.

Thanks!

[Rustic23]

Not a lawyer, but I would think if Person B has a POA for 'everything' for DM, then they could cancel Person A's POA.

I'll follow this to see what is the real answer.

[robertf57]

My JD came in a box of Crackerjacks, but to my understanding if DM is incapacitated, POA would be void. Durable POA would hold.

[48Fire]

Thanks, we went to a bank yesterday, and the manager said if DM comes in, and displays incapability they would actually freeze her bank account.

[MichaelB]

Quote:

Originally Posted by 48Fire Person A has a POA on DM's brokerage account. Five years go by. Then Person B gets a Durable POA on essentially everything for DM. DM now is basically incapable, in assisted living with advanced dementia. Is Person A's POA now trumped by the Durable POA of Person B? Seems to me that the POA was only in affect when DM was capable. Thanks!

The durable POA should have included a clause withdrawing all previous POAs. Even if it didn't, a regular POA is only effective while the person authorizing it is capable of making decisions. Once she becomes ill the POA can no longer be exercised and the durable POA holder has sole authority for whatever power was delegated in the document.

[48Fire]

Quote:

Originally Posted by MichaelB The durable POA should have included a clause withdrawing all previous POAs. Even if it didn't, a regular POA is only effective while the person authorizing it is capable of making decisions. Once she becomes ill the POA can no longer be exercised and the durable POA holder has sole authority for whatever power was delegated in the document.

Thanks, that was my understanding. The Durable POA does not have a special clause that I can see. I like its simplicity, but in some cases, it could use some details.

[LARS]

Again no lawyer, but the Durable POA means that you are legally the person. Therefore, I would think you could use your Durable POA to instruct Financial Institution that only your Durable POA is valid.

The problem with all this, at least this was my experience, when dealing with different financial institutions each one's legal department generally has their own way of doing things.

[48Fire]

Quote:

Originally Posted by LARS Again no lawyer, but the Durable POA means that you are legally the person. Therefore, I would think you could use your Durable POA to instruct Financial Institution that only your Durable POA is valid. The problem with all this, at least this was my experience, when dealing with different financial institutions each one's legal department generally has their own way of doing things.

Thanks, we have definitely found that the Financial Institutions (and employees) have different understandings. It is not urgent at this point, but we basically left because we needed to do other things, and we weren't really making any progress towards agreement.

[timo2]

Quote:

Originally Posted by 48Fire Thanks, we went to a bank yesterday, and the manager said if DM comes in, and displays incapability they would actually freeze her bank account.

I don't know anything about this subject, so I am wondering how this 'in person incapability observation by a non-health professional' thing has any legal basis? Isn't the documented POA what matters, not the bank manager's opinion?

[48Fire]

Quote:

Originally Posted by timo2 I don't know anything about this subject, so I am wondering how this 'in person incapability observation by a non-health professional' thing has any legal basis? Isn't the documented POA what matters, not the bank manager's opinion?

Here is my understanding:

1. A general POA doesn't cover incapability. Only a Durable bridges the dementia gap.
2. A Financial Institution is probably legally obligated to protect the client/customer.
3. If the client/customer comes in, and can't remember their name or where they live, then I think they tend to be conservative about protecting those assets.

[ivinsfan]

Quote:

Originally Posted by 48Fire Thanks, we have definitely found that the Financial Institutions (and employees) have different understandings. It is not urgent at this point, but we basically left because we needed to do other things, and we weren't really making any progress towards agreement.

If conflicting interests and paperwork start coming in to financial institutions, they pretty much go into CYA mode, for example just freezing the accounts completely. You'll probably find this to be a huge hassle. So I would say it is kind of urgent to get this settled...now the problem with any power of attorney durable or not, is that the person signing it must be of sound mind( at the time of the POA designation) or it's void.

You might not have much of a window to get this resolved.

[48Fire]

Quote:

Originally Posted by ivinsfan If conflicting interests and paperwork start coming in to financial institutions, they pretty much go into CYA mode, for example just freezing the accounts completely. You'll probably find this to be a huge hassle. So I would say it is kind of urgent to get this settled...now the problem with any power of attorney durable or not, is that the person signing it must be of sound mind( at the time of the POA designation) or it's void. You might not have much of a window to get this resolved.

We have the Durable POA, and she was of sound mind when she signed it, so all good. I would encourage others, though, to get this done, because 3 months later she was not so sound of mind.

[MichaelB]

Quote:

Originally Posted by 48Fire Thanks, that was my understanding. The Durable POA does not have a special clause that I can see. I like its simplicity, but in some cases, it could use some details.

Does is specifically list bank or financial institution transactions? If so, the bank should be disposed to accept it.

[48Fire]

Quote:

Originally Posted by MichaelB Does is specifically list bank or financial institution transactions? If so, the bank should be disposed to accept it.

Yes

[ivinsfan]

Quote:

Originally Posted by 48Fire We have the Durable POA, and she was of sound mind when she signed it, so all good. I would encourage others, though, to get this done, because 3 months later she was not so sound of mind.

Is there any conflict between you and the first designated POA, otherwise I can't see where there is a problem. If someone wants to fight you on this, the fact she is not of sound mind right now will be an obstacle in resolving this.
In fact, hopefully it is "all good" but I don't know if it will be that simple for you with the brokerage account.

[48Fire]

Quote:

Originally Posted by ivinsfan Is there any conflict between you and the first designated POA, otherwise I can't see where there is a problem. If someone wants to fight you on this, the fact she is not of sound mind right now will be an obstacle in resolving this. In fact, hopefully it is "all good" but I don't know if it will be that simple for you with the brokerage account.

Yeah, I have given up on the "simple" part. Pain in the butt. No conflicts, yet, just trying to avoid one.

[Taxman59]

My mother went to the bank with my sister and the durable POA for my father. The bank informed them that only the bank's POA form was valid. Not smart by the bank since my sister is a lawyer with an attitude! It was fun to hear how the manager tried legal sounding language to justify her position and the my sister demanding the manager talk to bank legal personnel. With my sister in the room, the attorney for the bank told the manager to accept the POA and stop trying to,practice law without a license! Bank managers will try to answer the question without consulting their legal dept. if you have problems, get the manager to contact the legal pros within the bank to sort it out.


Sent from my iPad using Early Retirement Forum

[48Fire]

Quote:

Originally Posted by Taxman59 My mother went to the bank with my sister and the durable POA for my father. The bank informed them that only the bank's POA form was valid. Not smart by the bank since my sister is a lawyer with an attitude! It was fun to hear how the manager tried legal sounding language to justify her position and the my sister demanding the manager talk to bank legal personnel. With my sister in the room, the attorney for the bank told the manager to accept the POA and stop trying to,practice law without a license! Bank managers will try to answer the question without consulting their legal dept. if you have problems, get the manager to contact the legal pros within the bank to sort it out. Sent from my iPad using Early Retirement Forum

haha, thanks. We didn't have a lot of attitude that day, weary from bigger issues. Next time, we will bring your sister just for fun

[wolf]

What other poster's have said is true. POA, not recognized by banks. Must
use "their" in house POA. Lawyer's do not volunteer this info.

Sometime, to be "practical", do not tell the financial institution anything, Just move the money out while you still have POA.

Sometimes, trying to be "too honest", causes a bucket full of headaches.

Been there.

[Walt34]

So much is variable by state law and past practices. If there is a conflict an hour of an attorney's time may be worthwhile. Often just a legal letterhead can make a lot of things simpler.

We had no issues with DW handling FIL's finances but it was a small town bank, he'd been banking there for 30 years, DW knew the bank manager who was straight out of central casting for "It's a Wonderful Life" so all went smoothly.

Everyone should be so lucky.