A power of attorney is a valuable tool in most estate plans, but only if that power of attorney is properly recognized. Banks and other financial institutions, fearing their own liability, are quick to scrutinize powers of attorney and may be wary of honoring them. Or banks may insist on the use of their own forms (which can often be inadequate for drafting limiting powers or specific instructions). To make matters worse, you may not realize your chosen bank or financial institution has an issue with your power of attorney until you’re incapacitated and the bank throws up roadblocks for your agent trying to diligently manage your financial affairs.
Getting your power of attorney recognized is more than a simple form
1) Check with your bank. It’s always a good idea to check with your chosen bank or financial institution. If you know where your agent will need to go to transact business, talk to someone at your local branch and find out what your bank requires. If your bank has specific forms, use them. If you need to add additional pages, speak with your lawyer about amending the standard bank forms to create the precise power of attorney terms you need. Also, remember that Oregon law limits the liability of someone who reasonably relies in good faith on an agent’s authority, so the easier you make it for your bank to conduct its due diligence the less likely you are to encounter problems.
2) Update your power of attorney. Even though Oregon law specifically prohibits someone from refusing to recognize your power of attorney based solely on the age of its execution, it’s a good idea to keep powers of attorney up to date by renewing them every six months. Banks are less likely to scrutinize a power of attorney that was executed six months ago than one that was executed twenty years ago.
3) Use alternatives. Remember that not all transactions require a personal appearance or signed document by your agent. For most electronic transactions like paying bills online, transferring money from one account to another, or even managing investment accounts, your agent can log into your account IF you have left your account usernames and passwords in a secure place that your agent can access. How you provide sensitive information to your agent is a matter of personal preference, but it can be anything from a list kept in your home safe to an encrypted file on your computer or cloud storage provider that you’ve shared with your agent. If this makes you uncomfortable, remember, this is the person you’ve chosen to manage your affairs if you lack capacity. If you don’t trust them with your personal information then you need to choose a new agent!
4) Talk to your attorney. When in doubt, ask your attorney. A carefully crafted estate plan should include consideration for decision making in the event of incapacity, and your attorney can provide guidance on making sure that, when the time comes, your power of attorney is properly recognized where it is needed.