We have a customer whose son has power of attorney for the customer’s account. The son suspects a family member may be trying to take advantage of his father and would like to limit the amount of money the customer may withdraw from his account. The son has not been appointed guardian of the customer’s estate. Does the son have the power to limit what funds our customer can withdraw from his account?

We recommend reviewing the son’s power of attorney document to determine whether he has the authority to control the customer’s account.

The Illinois Statutory Short Form Power of Attorney for Property provides the power to execute “financial institution transactions” in line item (b). This power includes the authority to “control all accounts and deposits” — assuming that this line has not been crossed out on your customer’s power of attorney document. We believe this power, if operative, would include the authority for the son to limit the father’s withdrawals from the account, and it even would authorize the son to close the account and establish another one on behalf of the father that does not grant him withdrawal privileges (although obtaining a court-ordered guardianship would be preferable for this approach to minimize intra-family challenges after the fact).

We should note that your customer, as the principal granting the power of attorney, may amend or revoke his son’s authority at any time if he wishes to have greater access to his account.

Importantly, if your bank suspects the financial exploitation of an elderly customer, state law encourages you to report the activity to the Illinois Department of Aging. Also, federal law may require you to file a suspicious activity report (SAR) if certain conditions are met. Your bank must file a SAR for suspected elder financial exploitation when a transaction aggregates at least $5,000, and your bank may voluntarily report suspected elder financial exploitation even when this threshold has not been met.

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) The agent is authorized to: open, close, continue and control all accounts and deposits in any type of financial institution (which term includes, without limitation, banks, trust companies, savings and building and loan associations, credit unions and brokerage firms); deposit in and withdraw from and write checks on any financial institution account or deposit; and, in general, exercise all powers with respect to financial institution transactions which the principal could if present and under no disability.”)

Illinois Power of Attorney Act, 755 ILCS 45/3-3 (The statutory short form power of attorney for property states that “this power of attorney may be amended or revoked by you at any time and in any manner.”)

Adult Protective Services Act, 320 ILCS 20/4(a) (“Any person who suspects the abuse, neglect, financial exploitation, or self-neglect of an eligible adult may report this suspicion to an agency designated to receive such reports under this Act or to the Department.”)

Adult Protective Services Act, 320 ILCS 20/4(a-5) (“A person making a report under this Act in the belief that it is in the alleged victim's best interest shall be immune from criminal or civil liability or professional disciplinary action on account of making the report, notwithstanding any requirements concerning the confidentiality of information with respect to such eligible adult which might otherwise be applicable.”)

FinCEN Advisory, FIN-2011-A003 (February 22, 2011) (Identifies red flags that could indicate the existence of elder financial exploitation, describes the general standards for reporting suspicious activity, and encourages voluntary reporting when not required.)

FinCEN Rules, 31 CFR 1020.320(a)(2) (Requires banks to file SARs when a transaction involves or aggregates at least $5,000 in funds or other assets, and the bank knows, suspects, or has reason to suspect that “(i) The transaction involves funds derived from illegal activities . . . (ii) The transaction is designed to evade any requirements of this chapter or of any other regulations promulgated under the Bank Secrecy Act; or (iii) The transaction has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the bank knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction.”)

FinCEN Rules, 31 CFR 1020.320(a)(1) (“A bank may also file . . . a report of any suspicious transaction that it believes is relevant to the possible violation of any law or regulation but whose reporting is not required by this section.”)

FRB Suspicious Activity Report Rules, 12 CFR 208.62(k) (Creates a safe harbor from liability for the disclosure of “reports of suspected or known criminal violations and suspicious activities to law enforcement and financial institution supervisory authorities, including supporting documentation, regardless of whether such reports are filed pursuant to this section or are filed on a voluntary basis.”)
Illinois Banking Act, 205 ILCS 5/48.1(b)(16) (Creates exemption from privacy requirements for furnishing information to law enforcement authorities, the Illinois Department on Aging and its regional administrative and provider agencies, the Department of Human Services Office of Inspector General, or public guardians “if there is suspicion by the bank that a customer who is an elderly or disabled person has been or may become the victim of financial exploitation.”)