Jan 30, 2018
by Debra Newby, Newby Law
DEAR READERS: Do you have a legal question on your mind? If so, please email me at firstname.lastname@example.org. Your name will remain confidential. This Q & A Legal Column is intended as a community service to discuss general legal principles and does not create an attorney-client relationship.
My uncle appointed me to help manage his financial affairs and signed a Durable Power of Attorney (“DPOA”) ”. When certain needs arose to use the DPOA, his bank took forever to approve it, and then to add more frustration, the bank prohibited me from doing some of the specific acts that were authorized in the DPOA. Just how useful is it?
Signed: Baffled Beatrice
Great question…and what a can of worms you have opened! A Power of Attorney (“POA”) is a complex creature that takes many forms. The world of POAs include Limited POAs, POAs for Health Care, and a Durable POA. A POA is very valuable, and in fact a necessity, when it comes to managing your affairs. The concept is that a person (called the “Principal” in legalese) can appoint another person, typically a family member or friend (called the “Attorney-in-fact” or “Agent”) to step into the Principal’s shoes and take certain actions on their behalf. Each type of POA has its own specified purpose and frankly, deserves its own column. But for the sake of space, I will only address a Durable POA, at the heart of your question. Next month we can look at other smart estate planning tools, including a Durable Power of Attorney for Health Care.
Typically, a Durable POA is executed to help manage the Principal’s financial affairs. The Principal needs to be over the age of 18 and of “sound mind”. The Durable POA must be signed, dated and notarized (and as a practical matter, some legal commenters suggest that up to four “originals” be created). Generally, the Principal can revoke the Durable POA at any time.
Now, here is where it gets tricky. If you go on the internet, you will see a multitude of sites that offer “free POA forms”. I suspect that some of the forms on the internet are not up to snuff. To bring some type of uniformity to the forms, California has wisely adopted “statutory forms”, i.e. forms that comply with the Probate Code. One credible site that you may consider is managed by the Sacramento County Public Law Library. Visit saclaw.org. [Disclosure: I have not researched or verified the multiple forms and resources on this website, so please consult your own legal professional or advisor before use.]
It sounds like your uncle may have signed a “Uniform Statutory Form Power of Attorney”, which by its nature contains language that most financial institutions should accept. The statutory form in essence lists up to 13 actions that the Attorney-in-fact can take on behalf of the Principal. Those actions, albeit worded broadly, seem rather clear.
My suspicion is that some banks are going a bit overboard by implementing specific and diverse policies for certain situations, which tends to dilute the underlying purpose of uniformity. The “knee-jerk” reaction to the fiasco at Wells Fargo is still lurking in the background (remember: millions of unauthorized customer accounts were opened). Perhaps some legal departments in banks are on “high alert”, resulting in an over-active tendency to closely review (and arguably challenge without grounds) language that is valid. If the bank cannot give a clear reason why your uncle’s DPOA does not conform to law, then I would invite you to look at CA Probate Code sec. 4406, which authorizes the Attorney-in-fact to get a court order to enforce the POA. The bank is liable for attorney fees should you prevail. Risky, but worth it if the bank is on shaky ground.
In summary, it sounds like your uncle is lucky to have you on his side. You must always keep his best interest in mind and be selective on what battles you chose to fight. There are times to fight and times to yield. As writer Vernor Vinge penned, “Intelligence is the handmaiden of flexibility and change.”
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