Ted (00:00.11)
Imagine this. Your father has just suffered a stroke and you rush to the bank with his power of attorney document in hand, only to be turned away. The reason? They say the POA is too old. Sound far -fetched? Unfortunately, it's a frustrating reality for many. In this video, we're going to dive into the murky waters of power of attorneys and financial institutions, a topic that could save you countless headaches and potentially thousands of dollars. Whether you're planning for your future,
or helping a loved one. Stick around to learn the insider tips and hacks that could make all the difference when it matters most. Remember, in a durable financial power of attorney, you are signing a legal document.
that is going to authorize at least one other individual to manage all of your financial affairs, even if you become incapacitated. Now remember, in many states like Ohio, there is no law that says any financial institution has to accept or recognize your power of attorney. What are we seeing happening these days with powers of attorney? What are some of the common pitfalls, some of the common
problems? Well, we see financial institutions regularly rejecting these legally signed powers of attorney. For instance, they are saying that a seven -year -old document is too old. Many are saying that if it's more than two years old, they won't recognize it. Perhaps they don't like the wording of the document. One local bank says that unless the power of attorney language specifically indemnifies them,
for relying upon the power of attorney, they will not recognize that POA. Some financial institutions are rejecting any power of attorney that isn't drafted by the financial institution. What is the consequence of a refused power of attorney? Well, the bottom line is that if you've granted power of attorney to someone, they're not going to be able to access your accounts at any financial institution.
Ted (02:09.954)
Therefore, they won't have the ability to write checks or they won't have the ability to withdraw funds or change beneficiaries or transfer assets into a trust. Instead, what you're going to be required to do is to go to probate court and do what we call living probate by filing for a very expensive and time consuming guardianship. And you'll end up with
a guardian of the person and a guardianship of the estate once you demonstrate that the individual is incapacitated. Let's talk about a proactive solution to this problem. One option you have is when you sign your power of attorney and designate a particular agent, you should present your POA to your bank or broker in advance and make sure that they send it to their legal team and approve it.
Getting the bank's legal team on board early on is a good way to go about this. Sometimes it also makes sense to make the agent an authorized signer on the account. Not a co -owner, but simply a signer on the account. That should enable the individual to have access to the account in the event you become incapacitated. In some states,
They have introduced what they call a statutory power of attorney. In other words, the specific language of the power of attorney is prescribed by that state's statute. And they will adopt penalties for financial institutions that refuse to recognize a statutory power of attorney. Unfortunately, we do not have that provision here in Ohio. There is no penalty for anybody refusing to recognize.
a validly drafted power of attorney. Therefore, there's no ability to go to court and to enforce the POA. While presenting the POA to the bank in advance is one option, my preferred option is rather than relying upon a POA for anything other than a retirement account, it makes more sense to me to transfer accounts to a revocable living trust to bypass all of these POA issues. will also bypass the guardianship issues. Why?
Ted (04:26.869)
because we're transferring the assets to the trust while you're alive and well and not trying to deal with them when you're incapacitated. The trust document will specify who your successor trustee is and at that time your successor trustee will be able to have access to the funds without any challenges coming from the financial institution.
So we've covered a lot of ground today from common POA pitfalls to proactive solutions and even some insider hacks. Taking action now can save you immense stress and expense down the road. It's far easier to address these issues proactively.
than to scramble for solutions in the midst of a crisis. By planning ahead, you're not just protecting your assets, you're giving yourself and your loved ones peace of mind. Found this information valuable and want to ensure your estate plan is rock solid. We're here to help. Take the next step in securing your family's financial future by visiting www.dateandestateplanninglaw.com/getstarted. There you can schedule a free goals and responsibility conversation with one of our experienced estate planning attorneys.
work with you to create a tailored plan that addresses your unique needs and concerns.