It’s about time!

Caretakers have been waging battles with banks, brokerage firms, insurance companies and government agencies to be able to use Powers of Attorney to manage their loved ones’ assets.   While there are legitimate concerns by these institutions about safeguarding their depositors funds, we think that the real motive is to simply keep the assets under their control longer.   There seems to be a systematic effort to keep people from accessing their funds.   There are complicated forms, silly reviews, inconsistent advice from representatives that make it almost impossible to get to talk to someone let alone manage funds.

Pennsylvania law requires an institution who is presented with a Power of Attorney to honor the power unless they have knowledge that there is foul play.   The bank is permitted to ask for confirmation that the principal is still alive and has not been declared incapacitated and that the power has not been revoked.   That is all they can ask.   However, they often ask for more.  We have seen some banks demand that a Guardian be appointed!   This is quite an amazing request given that this is what people try to avoid when they name agents under Powers of Attorney.  We are often asked to send Powers to legal departments for a “review.”   This often leads to an endless wait while bank attorneys who have little expertise in these matters try to understand what they are reading.   Another ploy is to simply “misplace” the document and ask to have it sent again.  And forget about trying to work with Social Security and Medicare and the VA.   They have their own complicated forms with more complicated formalities.  They don’t seem to realize that people are using these Powers because their family member CANNOT act on his or her own behalf!  Asking for them to sign off on another complicated form is stupid.

A recent Florida case against Bank of America finally gets the consumer some justice.  In the Florida case, Bank of America rebuffed the request of an agent under a durable power of attorney (POA) to withdraw funds from a jointly held account. The agent fought back in court and won a $64,000 judgment against the bank. Florida law imposes penalties on financial institutions that refuse to honor reasonable requests from agents named in properly executed POAs.  In November 2009, after a week-long trial, a Florida jury returned a verdict against the bank and awarded $64,142 to an estate. The jury found that Bank of America had not acted reasonably when it rejected the caretaker’s request.  Of course, Bank of America, plans to appeal.  Pennsylvania also has penalty provisions.   We usually get a quick response from a bank when we send them a copy of the law and ask them why they are not honoring the Power.  We point out that if they have knowledge of fraud or duress then we would like to know about it immediately.  We then advise them if they do not have such knowledge then they are in breach of the law and will be held responsible for damages.   That usually gets their attention pretty quickly. 

mm About Leonard L. Shober

Leonard L. Shober has focused a quarter century on representing clients in their estates and tax matters. He began his legal career in an estate planning practice. However, his interest in taxes and estate planning led him to pursue a Master of Laws (LLM) from Temple which he completed in 1994. Len continued his estate and tax practice which ultimately led to a focus on the needs of the elderly and disabled. At Shober & Rock, Len focuses on elder law, tax and estate planning and estate and trust administration.

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