Resistance to Power of Attorney – Part 3
In this week’s post we continue with the topic of power of attorney and specifically how to handle resistance from banks and financial institutions. Last week I outlined the scenarios in which a bank can refuse to honor a power of attorney. New Jersey law says that a banking institution does not have to accept the agent’s authority to act if it has actual knowledge of or believes in good faith that the POA is not genuine or has been revoked or that the principal is dead or was under a disability when he/she signed the POA. But what does “good faith” really mean? The statute defines good faith to mean when something is done honestly, regardless of whether it is done negligently. So let’s look at the common occurrence that I mentioned in Part 1 (my post on 7/30/18), in which the bank insists that the POA be its own form. Is that acting in good faith? I would submit that it clearly it is not acting in good faith because the bank in this case has found nothing wrong with the POA that was presented to it. It simply would prefer – for its own convenience and
Resistance to Power of Attorney – Part 2
Last week’s post again addressed the use of powers of attorney and specifically the problem of encountering resistance by a financial institution. As I explained, many financial institutions prefer that customers sign their own form of power of attorney and do so in front of one of their employees. This is for their protection but complying with their request isn’t always possible. Many of our elderly clients are unable to travel so cannot make the trip. Sometimes they can no longer even get on the phone. So how does one counter a bank, for example, that says they need Mom to come to the branch to sign a power of attorney because their legal department questions the validity of the one she signed a few years ago. It helps to know a little bit about what the law says about powers of attorney. Firstly, New Jersey law says that a power of attorney must be in writing. It must be signed by the principal and acknowledged before a notary public. There is also a specific section that covers banking transactions. If the power of attorney gives the agent the power to conduct banking transactions and makes reference to that
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How to Handle Resistance to POA – Part 1
I have written several posts over the years on the importance of powers of attorney and the problems many people encounter when trying to use them. It seems that as time has passed the problems have only increased in frequency. Just this past week we received two calls from family members serving as agent under a power of attorney for a loved one. When presenting the POA to a bank or other financial institution many agents experience resistance. Often the financial institution will insist on the principal – the person who has signed the power of attorney – to be present. But if the principal can’t appear in person, which is increasingly the case as the population ages, does that mean the power of attorney is invalid? What if the bank says the POA is too old? Can that be true? Unless you know the law and your rights, it is difficult to respond to these questions. State law governs powers of attorney so there may be differences from state to state. Next week I will share with you what New Jersey law provides and how to address the resistance you may experience.