What is a Durable Power of Attorney? A durable power of attorney is one of the most important estate planning and incapacity planning documents there is. It allows someone you appoint -- your agent or "attorney-in-fact" -- to act in your place for financial and legal purposes when and if you ever become incapacitated. An effective Durable Power of Attorney minimizes or may eliminate the need for the appointment of a Guardianship or Conservator. However, many people experience difficulty in getting banks or other financial institutions to recognize the authority of an agent under a power of attorney.
Banks are often reluctant to accept powers of attorney for fear of being sued if the power of attorney isn't valid or has been revoked. A certain amount of caution on the part of a financial institution is understandable. Still, some institutions go overboard, for example requiring that the attorney-in-fact indemnify them against any loss.
Be proactive. After signing your Durable Power of Attorney contact your bank and ask them if they require any additional documentation to honor the document. You should also visit or contact every financial institution that you have an account with and forward them a signed copy of the power of attorney for their records. Many banks or other financial institutions have their own standard power of attorney forms. If this is the case, obtain the bank's form and sign it in addition to your own power of attorney form. While, it isn't legally necessary, signing the bank's standard form can save your agent a lot of difficulty down the road.
It is also a good idea to review and update your powers of attorney every 3-5 years. Periodic review of your estate plan and documents can help insure that the people that you chose to act for you are still the best choice. From the bank's perspective it helps alleviate their argument that the power of attorney is "stale" or outdated.
If a bank is giving you a hard time about accepting a power of attorney, you can try talking your way up the chain of command. You can also have the lawyer who prepared the power of attorney call the bank. If that still does not work, you may have to contact a lawyer to deal with the bank.
Click here for more information about Powers of Attorney, or contact our Estate Planning Attorney Jill E. Sugarman at 401/421-5115 ext. 215 or via e-mail at