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Mr. Miller has many years of experience in designing and implementing a comprehensive variety of Trusts, Wills, and other estate planning documents, as well as settling estates in the most expedient and appropriate method. Further, he counsels and assists clients on becoming eligible for VA benefits and Medi-Cal.

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Is the Bank Giving You Problems with a Power of Attorney?


By merv,

  Filed under: Elder Law, Uncategorized

Dear Mr. Miller:

My Mom has lost it.  She has no ability to make decisions or even understand.  I had asked her to put me on her checking and savings accounts last year but she never did.

I want to be able to pay her bills.  I took the Power of Attorney which she signed a number of years ago to the bank but they refused to allow me to sign the checks, something about we needed her doctor’s certification.  I gave them the letter from her primary care physician and it was quite clear that she couldn’t handle her financial affairs.

How do I pay her fire insurance premium on the house or anything else?   This is a huge problem.  What do I do?

Panicked Daughter

Financial Institutions Getting Stricter
Power of Attorney Trigger
Attorney Drafted Certificate
Bank Legal Department Involvement
Examples
Dealing with the Legal Department
Call Us

Dear Panicked:

Financial Institutions Getting Stricter:  Lately, I have been seeing an uptick in problems with financial institutions accepting power of attorney (POA) documents.  It appears they are becoming stricter with their policies.  To make matters worse, it has been my experience that every institution has different rules, each branch interprets those rules differently, and seemingly the interpretations change from week to week.  Some banks and brokerage firms are worse than others.

Power of Attorney Trigger:  Without seeing the actual documents, it is impossible to give you a definitive answer.  However, in most cases this situation is easily resolved.  The governing rules are in the POA (or the Trust document if the title to the account in question shows the Trust as the owner).  Most POA’s are of no consequence until the principal can no longer handle their financial affairs.  Many POA’s have a paragraph that essentially defines when the principal (your Mom in this case) is considered no longer mentally competent such that the agent (the holder of the power—presumably you in this case), is then entitled to act.  We generally refer to this as the “trigger paragraph.” Often times the trigger is one or two physicians who state in writing that the principal “can no longer handle their financial affairs.”  Some POA’s require that one physician has to be a board certified neurologist or psychiatrist.  Others require that the writing has to be notarized or signed under penalty of perjury.

Again, the exact requirements are typically in the POA.  It is important that the physician’s letter meet the requirements of what needs to be said, exactly, and that the document is notarized or signed under penalty of perjury if so required by the POA.  Physician letters that I have seen from time to time rarely line up with the required wording.

Attorney Drafted Certificate:  Since the financial institutions seem to be getting more strict, lately I have been advising my clients to have us draft the certification document for the physician(s) to sign.  Since I learned long ago that physicians want to deal with people and really don’t like paper work, I give the certification to my client to take into the physician at the next appointment.  If I mail it, the document usually goes to the bottom of the physician’s paper pile rarely to see the light of day again.

Bank Legal Department Involvement:  Another problem that I have been seeing lately with physicians is that in the larger practices the physician will simply send the document to his legal department for fear of signing something inappropriate.  That, of course, delays things even more.   I guess the signing “under penalty of perjury” is what causes this approach.

Examples:  Two stories here just to indicate the kind of problems you can run into.   I had one physician who said he would sign.  This document had to be signed in front of a notary.  We set up the mobile notary to go to his office at a particular time.  Notaries almost always need to see government issued ID (i.e a drivers license) in order to notarize the document.  When this physician found that out, he panicked and refused to sign.  I’m not sure what his problem was.

Then there was the other physician, actually for a relative, who responded to my letter asking for a diagnosis and her agreement that the relative could no longer handle her financial affairs.  I used that information to put everything into a formal certificate which I sent to the physician.  (The physician had been informed that I was going to be doing this, so it should not have been a surprise to her.)   When I did not receive any response for some time, I followed up with the physician’s staff–and followed up and followed up.  Finally, when it was clear we were making no progress, I had the staff member relay to the physician that if she didn’t sign I was going to call her in for a deposition to get her findings and conclusions on the record.  Then I added the knock out blow—I was going to pay her as a regular (i.e. percipient) witness  as opposed to an expert witness since she would simply testify to what she had already put in writing.  In other words, I’d be paying her $35 instead of $1000 or so for her time.  This caused a very quick phone call from the office manager who said she would have the physician sign but wanted $250 for the service.  I had no problem with that and sent a check.

Dealing with the Legal Department:  If for some reason getting the proper type of physician(s) to sign in the proper format doesn’t work and the legal department still rejects the document, there is still a fairly easy solution.   I have been involved with many lawyer discussion groups where this has come up and the participants moan and groan about how incompetent the institutions’ legal departments are and that they don’t know the law.  Their conclusion is that the only answer is to file a lawsuit.  What I believe these attorneys seem to forget is that these types of issues that get up to the legal department are not terribly complex.  So I suspect the case gets assigned to the newest and greenest attorney.  Now, somehow the discussion group participants think that this attorney should know the law of all 50 states (each state being somewhat different).  Of course, they typically don’t.  But they do have access to the law of all 50 states.  So I have had great success with sending a letter to the legal department of the institution walking them through California law (citing the relevant statutes), the document (citing the specific paragraphs), and the right of my client to haul them into court to get a court order and have attorney fees assessed against them.  This method has worked quite well for me in the past.

Call Us:  Call us at 760-436-8832 so we can look over the documents and help you resolve the issue.

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About Living Trusts

About Living Trusts is hosted by the Law Offices of Merwyn J. Miller, as your online resource center to help you explore these key issues, and others, regarding your estate.

Merwyn J. Miller, J.D.

  • Board Certified Specialist in Estate Planning, Trust & Probate Law
  • Co-Author of legal text book and of “Don’t Go Broke in a Nursing Home
  • Teacher of law courses at public and private colleges
  • Continuing Education Instructor for attorneys
  • Columnist for largest regional newspaper in San Diego County and professional journals for 15 years, Contributing author to the book “In Your Service: The Veteran’s Friend”
  • Masters Degree in Financial Services - Estate Planning
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