Q+A: We have a Power of Attorney, but the bank said they won’t take it. How is that possible?

Answer:

This frustrating situation happens more often than you'd think, and it highlights why estate planning documents need regular attention-not just a one-and-done approach.

Banks and financial institutions have become increasingly cautious about accepting older power of attorney documents for several reasons. First, they worry about potential fraud and want assurance that the document reflects your current intentions.

A power of attorney from ten years ago might not account for changes in your life, relationships, or mental capacity.

Many institutions also prefer documents that include specific language about their particular requirements. Banking regulations and internal policies change over time, and older documents might not contain the precise wording that gives institutions confidence to honor them without legal risk.

Additionally, if there's any question about the document's validity, such as unclear signatures, missing notarization details, or outdated formatting, banks will often err on the side of caution and refuse to accept it.

What You Can Do

The solution is straightforward: update your power of attorney documents regularly, ideally every three to five years, or after any major life changes. Fresh documents signal to institutions that your wishes are current and intentional.

When updating, make sure your attorney includes language that specifically addresses financial institution requirements. Many modern power of attorney forms include provisions that make banks more comfortable accepting them.

Don't Wait for a Crisis

The worst time to discover your power of attorney won't be accepted is during an emergency when you actually need it. If your documents are more than a few years old, or if you're not sure they'll work when needed, it's worth scheduling a review.

Remember, these documents are only valuable if they actually function when your family needs them most. A current, properly drafted power of attorney can mean the difference between seamless financial management and costly court proceedings during an already stressful time.

Give us a call if you need help creating a Power of Attorney.