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Powers of Attorney – Will They Work?

A recent New York Times article was titled, “Power of Attorney is Not Always a Solution.” It related the story of a woman who was given a power of attorney by her brother who was later afflicted by dementia. When she tried to use the power of attorney, banks were reluctant to accept her power since her name listed on the document was her legal first name, but not the one she used as an adult.
Another problem with powers of attorney is that, although they typically have no expiration date, many financial institutions are reluctant to recognize them if they are over five (5) years old.
A bank’s reluctance to accept a power of attorney has a valid basis, as a power of attorney can be used to commit fraud. Banks have been sued for allowing access to accounts and they are in a protected position by refusing to release money.
Another option can be the use of a revocable trust with provisions for Successor Trustees. Banks are more comfortable that the trust was executed when the grantor had sufficient capacity.
These issues are a reminder to draftsman and clients that documents need to be both accurate and up to date.

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