Topic: Power of Attorney
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Can we rely solely on a power of attorney (POA) document to allow an agent to transact on a customer’s account, even if we have had no contact with our customer regarding the POA? If so, is it advisable to have the agent complete an “Agent’s Certification and Acceptance of Authority”?
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Yes, your bank may rely solely on a POA document that grants the agent with the authority to conduct financial institution transactions on your customer’s account — provided that the POA document meets the conditions explained below. A valid Illinois POA document must be signed by your customer, notarized, and witnessed. Also, because this agent…
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An elderly woman and her adult daughter are joint owners on a demand deposit account. The daughter believes that her brother is taking advantage of their mother and would like to prevent her mother from making withdrawals from the account. The daughter also has a power of attorney for the account. What documentation do we need to comply with the daughter’s request? Do we need a court order declaring the mother’s incompetency before we can restrict her access to the account?
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We recommend reviewing the daughter’s power of attorney document and the documentation setting up the account to determine whether the daughter has the authority to completely control the mother’s interest in the account. The Illinois Statutory Short Form Power of Attorney for Property provides the power to execute “financial institution transactions” in line item (b).…
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A customer delivered an Illinois Short Form Power of Attorney for Property (POA) to our bank that does not provide a date in section 6 of the POA, which reads: “This power of attorney shall become effective on . . . .” The space where a date can be inserted has been left blank. Does this mean that the POA is effective immediately?
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Yes, an Illinois Short Form Power of Attorney for Property (POA) becomes effective as of the date it is signed unless the principal alters the effective date by initialing section 6 and inserting a future date or event on which the POA will take effect. Assuming the POA is properly signed and notarized, your bank…
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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?
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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” —…
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We have two customers who jointly own a safe deposit box. One of the joint owners executed a statutory short form power of attorney (POA) in which “safe deposit box transactions” has not been stricken. Can we allow the agent authorized in the POA to access the jointly owned safe deposit box? Our safe deposit box agreement allows either owner to access the box.
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Yes, we believe you may allow an agent with an Illinois power of attorney document that includes “safe deposit transactions” to access the principal’s jointly-owned safe deposit box. The Illinois Statutory Short Form Power of Attorney for Property provides the power to execute “safe deposit box transactions” in line item (e) if it has not…
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We have a disabled customer who is no longer able to travel in an automobile and would like her caregiver to cash checks and withdraw funds from her account. However, the customer doesn’t want to add the caregiver as an authorized signer and is not interested in a power of attorney or opening a second account with the caregiver as a joint owner. The customer also does not want to use internet or telephone banking, even with our assistance and training. The caregiver was in a branch recently and was very ornery with our staff. Also, we’re not sure if we are comfortable with cashing checks for the caregiver, even if the customer has endorsed the checks, given that the customer will not be present when we cash the checks. Does Illinois have anything like the EU’s “third party mandate” that could resolve this situation?
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Based on the facts provided, your bank may want to consider reporting this matter as suspected elder financial exploitation. Additionally, if you have had no communication with the customer, and only the caregiver has informed the bank of the customer’s wishes, we recommend attempting to communicate with the customer directly. Whether to cash checks presented…
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We received a letter from a doctor indicating that a customer no longer has sufficient mental capacity to make financial decisions. The customer has a short form power of attorney. Does this become a durable power of attorney by default, or is it no longer effective due to the customer’s mental condition?
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Whether a power of attorney document survives the principal’s incapacity depends on the wording of the document itself. If the power of attorney document does not state otherwise, it will be treated as durable — meaning that it will continue “until the death of the principal, notwithstanding . . . the principal’s disability or incapacity.”…
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We have a deposit customer who is no longer competent. The customer’s daughter has come to us with a trust document naming the customer as the beneficiary and the daughter as the trustee, together with a power of attorney for the healthcare of the customer. The daughter would like us to retitle the accounts as trust accounts so that she can transact on them as the trustee. Can we make that change?
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No, we do not recommend making that change based on the documentation described. We do not believe the customer’s daughter has the necessary authority to have the accounts retitled or to transfer the funds into a trust account. The daughter’s power of attorney for healthcare allows her to make medical decisions for the customer but…
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A customer is an agent with a power of attorney (POA) for her mother and disabled sister, and would like to limit their access to their accounts. Can the customer rely on the POA to restrict their access to their funds, such as by closing the mother and sister’s accounts and establishing new accounts in the customer’s name? Or should she be appointed as their guardian first?
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No, we do not believe an agent with power of attorney may restrict a principal’s access to their accounts. The Illinois Statutory Short Form Power of Attorney for Property permits an agent acting under power of attorney to “open, close, continue and control all accounts and deposits in any type of financial institution.” However, the…