Prevent Your Power of Attorney from Being Ignored

Banks are often reluctant to accept powers of attorney for fear of being sued if the power of attorney isn’t valid. A certain amount of caution on the part of financial institutions is understandable. Still, some institutions go overboard, for example, requiring that the attorney-in-fact indemnify them against any loss.

To prevent problems later, contact your bank when you execute your power of attorney to find out what information it needs to accept the document. Many banks or other financial institutions have their own standard power of attorney forms. If this is the case, get the bank’s form and sign it in addition to your own power of attorney form. While it isn’t legally necessary, signing the bank’s form can save your agent a lot of trouble and time down the road. In addition, you can provide the bank with copies of your power of attorney.

If a bank is giving you a hard time about accepting a power of attorney, you can try talking your way up the chain of command. You can also have the lawyer who prepared the power of attorney call the bank. If that doesn’t work, you may have to have a lawyer deal with the bank. In addition, your state may have enacted a law that allows for sanctions against institutions that unreasonably refuse to accept a power of attorney. For example, New York law makes it unlawful for banks, or any third party, to unreasonably refuse to accept a duly executed statutory power of attorney. The only remedy is a special proceeding in court to compel the bank or third party to accept the power of attorney.