By: Verena Meiser, Senior Associate – firstname.lastname@example.org, 443-393-7696
You have a power of attorney in place to name agents who can handle your financial affairs during any periods of incapacity you might encounter. Is there anything you can do to make it easy for your agents to step up and act on your behalf? Yes, there are a few preliminary steps you can take to reduce challenges for your agents as they try to assist you.
As a brief review of powers of attorney, remember that your agent is only authorized (by you) to take those actions you expressly include in your power of attorney. Thus, pay close attention to the provisions of your power of attorney, and preferably discuss them with your estate planning or elder law attorney. At the time you plan your power of attorney, you will also consider whether to make your agents’ authority effective immediately upon signing or contingent upon your physician’s determination that you have lost your capacity to handle your financial affairs. That decision may hinge upon who the individuals or corporate institutions you name as your agents and successor agents are. You will also decide who you trust fully, so that you feel comfortable naming them as your agent.
As you take the first step to ensure successful implementation of your power of attorney, keep in mind that we live in a world filled with fraud. As a result, financial institutions need to be extremely cautious who they communicate with regarding your accounts. When your agent first contacts your bank or investment institutions, your agent will need to identify himself or herself and prove their identity. To help your agent in advance, I recommend you introduce your initial, and perhaps also your successor agents, to your financial adviser, accountant, and local branch of your bank and investment bank. A face to face meeting is always best, however, if distance or other factors make that difficult, at least a phone conversation is advisable. In addition, provide everyone with full contact information for your agents. Ask your financial institution how they wish to verify your agent’s identity when your agent contacts them in the future upon your incapacity. This is particularly important when a face-to-face meeting is not possible. Your goal is to allow your agent to be recognized by your financial institutions without having to go through a challenging process of proving their identity.
As a second step, when you talk with your financial institutions, discuss their in-house power of attorney. Many offer their own power of attorney form, which has the advantage that it (usually) never expires, however, those forms tend to have the limitation of allowing you to only name one agent and no successor. Provide a copy of your power of attorney listing successor agents, and verify that they will honor your document and recognize your successor agents without any burdensome procedures for your successor agents.
The third step is to make sure your bank will readily accept your designation of agents, in particular, if you wish to name co-agents. Many financial institutions hesitate to work with two or more agents, as it increases their potential liability. Again, let every bank and investment institution know what your wishes are regarding your choice of agent or co-agents, and have that conversation before you need your agents’ assistance. Before you name co-agents, be sure that such a designation will not cause your agents difficulties when they try to help you with your financial matters.
Your estate planning or elder law attorney can provide valuable support as you speak with your financial institutions.