IBA Compliance Connection

Your go to source for compliance!

A customer has multiple accounts with our bank. The customer gave their daughter power of attorney (POA) with full rights. One of the customer’s accounts was retitled to reflect this, but the other account was not. Can the daughter access the other account even though she is not listed in the account title as having POA? Is a POA agreement specific to the account number, or does it apply to the customer and their entire portfolio?

—

by

admin

We believe the daughter may access all of your customer’s accounts — provided that she has been granted a valid POA for property using the Illinois Statutory Short Form Power of Attorney for Property, and the “financial institution transactions” category of powers has not been stricken out.

In Illinois, the Statutory Short Form Power of Attorney for Property authorizes the agent to “open, close, continue and control all accounts and deposits in any type of financial institution” on behalf of the principal — unless the “financial institution transactions” category of powers has been stricken out. Additionally, this general authorization does not apply to trust accounts subject to the Illinois Trust Code, “for which specific reference to the trust and a specific grant of authority to the agent to withdraw income or principal from such trust is required.”

We recommend reviewing the POA form to confirm whether your customer’s daughter has been granted the “financial institution transactions” category of powers and that this category of powers is not limited to particular accounts or account numbers.

For resources related to our guidance, please see:

  • Illinois Power of Attorney Act, 755 ILCS 45/3-4 (“Explanation of powers granted in the statutory short form power of attorney for property. . . . (b) Financial institution transactions. The agent is authorized to: open, close, continue and control all accounts and deposits in any type of financial institution . . . This authorization shall not apply to accounts titled in the name of any trust subject to the provisions of the Illinois Trust Code, for which specific reference to the trust and a specific grant of authority to the agent to withdraw income or principal from such trust is required pursuant to Section 2-9 of the Illinois Power of Attorney Act and subsection (n) of this Section.”)
  • Illinois Power of Attorney Act, 755 ILCS 45/3-3 (“Statutory short form power of attorney for property. . . . (NOTE: You must strike out any one or more of the following categories of powers you do not want your agent to have. Failure to strike the title of any category will cause the powers described in that category to be granted to the agent. To strike out a category you must draw a line through the title of that category.) . . . (b) Financial institution transactions. . . .”)