Powers of Attorney and Your Financial Institution
A Power of Attorney, if used carefully, is an important estate planning tool. This legal document is commonly prepared to provide for situations where a person cannot manage his or her own affairs. It gives another person (whom you appoint) the power to deal with your legal and financial affairs when you are unable to (many spouses appoint each other and / or their adult children). Many of my clients do up their Powers of Attorney, appointing people they trust fully, with no intention of their Power of Attorney being used until some undetermined time in the future (accident, dementia etc.). They leave it in our vault, or they keep it somewhere safe at home.
What I am finding lately though, is that financial institutions are becoming more and more stringent in their internal requirements / policies regarding whether or not they will accept the Power of Attorney. Keep in mind that the financial institutions role is to protect their client first and foremost. If their client (the Donor under the Power of Attorney) is incapacitated, then this can be problem – they have no way of checking with their client that the Power of Attorney is valid (even though it is a properly prepared Power of Attorney).
Theoretically, as long as your Power of Attorney is properly prepared and witnessed, and the financial institution has no reason to suspect that it is invalid, it should be recognized. That being said, to avoid any issues with your financial institutions internal policies “when the time comes”, it is strongly recommended that you go to your financial institution and make sure they put a copy of your Power of Attorney on file and confirm the arrangement directly with you, their client. You should also send a copy to any other financial institutions that you deal with. This way, they will have a note on your file that you personally (their client) advised them of the Power of Attorney that you had put in place and confirmed its validity while you were of sound mind.
This is provided as information ONLY; it should NOT be construed as legal advice. You should consult with a lawyer to provide you with specific advice for your own situation. For more information on estate planning/incapacity planning and to discuss your specific circumstances, please contact Vanessa DeDominicis on 250-869-1140 or firstname.lastname@example.org. Vanessa practices in the area of Real Estate and Wills/Estates at Pushor Mitchell LLP in Kelowna and would be more than happy to assist you.