“If you find it increasingly difficult in recent years to have your power of attorney recognized by banks and financial institutions, it might help to know some of the history behind both changes in the law and in attitude.”
If you present a POA (Power of Attorney) to a bank and the agents are described as Bill and Samantha, for instance, instead of Samantha or Bill, the bank clerk may bristle. John as agent under power of attorney with Mary as successor agent is more likely to be acceptable. The use of the word “and” in a POA often presents a problem to banks. Did the document get drafted with the intent that Bill and Samantha both be present for any transactions?
In Pennsylvania, major changes were made to the POA law in 2014 that addressed wording, witnessing and other requirements and protections for the party accepting the POA. The “Vine fix” law describes what a bank, financial institution or other party who is presented with a POA can and cannot do. The “Vine fix” provides immunity to anyone who accepts a POA in good faith, without actual knowledge that the POA is invalid, says The Mercury in the article “Planning Ahead: Will your bank honor your power of attorney?”
This law came about as a result of a case, Vine v. Commonwealth of PA State Employees’ Retirement Board. A Pennsylvania State employee, who was incapacitated following a car accident and a stroke, was given a POA to sign by the man who was then her husband. He changed her retirement options and later filed for divorce. At issue was the question of whether Mrs. Vine could invalidate his option and file for disability benefits. She did not have legal capacity, when she signed the document.
This was a case of hard facts making bad law. The State Supreme Court found that a third party (the Pennsylvania State Employees Retirement Board) could not rely on a void power of attorney, even where it did not know it was void when it was accepted. Banks saw the decision and were concerned that they could be sued for damages in similar cases.
The new law offers some immunity and additional protections for banks. However, as a result, there’s a little more push back with banks recognizing agents under power of attorney. The bank can request an agent’s certification or affidavit or opinion of counsel, as to whether the agent is acting within the scope of his legal authority. There is still a civil liability for refusing to accept a power of attorney that meets all the requirements.
Some estate planning attorneys have their clients obtain Power of Attorney forms directly from the institutions. This decreases the chances of any problems, when POAs are presented. It’s also a good idea to update the POA when you update your estate plan, which should be every three or four years. Regardless of your state of residence, a POA dated 10 or 15 years ago is likely to meet with some scrutiny. Talk with your Cincinnati estate planning attorney about the best way to address this in advance.
Remember: “An ounce of prevention is worth a pound of cure.” When making your estate plans or when probating an estate or administering a trust, do not go it alone. Be sure to engage a Cincinnati estate planning attorney.
For more information about estate planning, probate or trust administration in Cincinnati (and throughout the rest of Southwest Ohio) and to review free resources regarding estate planning, probate or trust administration, visit my website. If you have questions regarding this article or a particular legal matter, feel free to contact me at 513-399-PLAN (7526).
Reference: The Mercury (April 2, 2019) “Planning Ahead: Will your bank honor your power of attorney?”