Elder Law Answers
What Should I Do If the Bank Won't Honor My Power of Attorney?
My father and mother executed a co-durable power of attorney naming my brother and me as joint attorneys-in-fact. My fathe...
Read moreCan Financial Companies Refuse to Honor My Parents' DPOA?
- October 18th, 2023
Q
My parents have a durable power of attorney (POA) executed, but some of their financial companies are not honoring this and request their own forms to be used. These forms, however, have the statement that they "reserve the right, in its sole discretion, to no longer honor instructions from an AIF and will notify the principal if it chooses to do so". This directly conflicts with the general POA written by their attorney, and it does not seem ethical for them to request that we use this document, as they are already stating up front that they can choose not to honor it. What should be done in this situation? Get attorney involved? Do the financial companies ever back down on this?
A
You are right. As far as we’re concerned, these financial institutions are violating the law. However, it’s usually a lot cheaper to acquiesce then to fight them, which is why they get away with it. They’re just concerned about their own potential liability if someone misuses a durable power of attorney, not the cost they may impose on a family that must seek guardianship or conservatorship despite having done the appropriate estate planning. We always recommend that clients execute the financial institution’s forms as well as a general durable power of attorney. Revocable trusts also seem to work better. We’ve never seen a bank or financial institution object to the appointment of a co-trustee or successor trustee.
Harry S. Margolis practices elder law, estate, and special needs planning in Boston and Wellesley, Massachusetts. He is the founder of ElderLawAnswers.com and answers consumer questions about estate planning issues here and at AskHarry.info.