“The best laid plans of mice and men often go awry.”  Although we hate to admit it, this statement will also sometimes apply to estate planning; and more often than we would like, it happens with powers of attorney.

A power of attorney is the document in which you nominate an agent (or attorney-in-fact) to make financial decisions and take legal action for you when you are incapacitated or otherwise unable. (This does not include healthcare decisions, covered in another document called a health care directive.) Unfortunately,  depositors sometimes experience difficulty in getting banks or other financial institutions to recognize the authority of an agent under a power of attorney.

This difficulty usually has nothing to do with the validity of the document; rather, it is the bank’s attempt to protect itself.  But while a little bit of caution is understandable, it can have frustrating—or even tragic—results if not addressed.  Luckily, there are steps you can take to improve your chances of having the bank honor the powers you have delegated to your Agent.  Here are a number of suggestions:

  • Talk to your bank about your plans ahead of time.
  • Sign the bank’s own forms in addition to the more comprehensive one prepared by your attorney.
  • Ask your financial institutions if they have any requirement for powers of attorney.
  • Update your power of attorney forms or documents frequently (every 2-5 years.)

Talking to a representative from your bank every 2-5 years may seem like an inconvenience now, but imagine the inconvenience if you are incapacitated and your agent is unable to access the funds he or she needs to pay your bills, make your mortgage payment, or provide for the needs of your family. A little bit of time spent now can save a mountain of stress later on. If all else fails, you might need your attorney to remind the bank that California laws imposes monetary penalties upon banks and others who refuse to honor valid powers of attorney; the threat of legal action from a credible source will often solve the problem.