Lending institutions and brokerage firms continue to tighten up their policies regarding the types of power of attorney documents that they will or will not take. We frequently receive calls from people who are standing at the bank trying to complete a transaction with a perfectly legal power of attorney, only to be told that the document is “too old” or “stale” and won’t be accepted.
While a power of attorney (POA) does not technically does not expire unless it’s revoked by the person who created it, banks have their own policies that the customers must abide by. I’ve seen situations where a power of attorney was rejected that was only six months old!
Lending institutions create these policies to avoid liability if the person who created the power of attorney has passed away and the agent is using the POA without really having the right to. There’s also a possibility that the person who created the power of attorney has since revoked the older document and created a new form that names a new agent. The bank would have no way of knowing that such changes have been made, so an older document serves as a “red flag” to verify the rights of the agent.
If you run into this situation, don’t panic. Usually, the issue can be resolved by providing more information. For example, the agent may be asked to sign an affidavit stating that the power of attorney is current and still in force. If the person who created the power of attorney is still alive and of sound mind, the institution may contact them to verify that you have the rights that you say you do.
Another way to avoid trouble is to get into the habit of having the document “refreshed” by an attorney every 1-3 years. It’s an inexpensive and easy process and helps to ensure that the document meets current standards required by most lending institutions. For agents who do not have this option (perhaps their loved one is now incapacitated), contacting an estate planning attorney may be necessary to work out any additional issues that the bank may have with the document.
If it’s been a while since you’ve “refreshed” your power of attorney, or you are an agent who’s run into a snag with a bank and you want to know what your next steps should be, please feel free to contact us at (813) 438-8503 to schedule an initial meeting at our Brandon law firm.