Why Did Financial Institutions Refuse to Honor Her Power of Attorney? - Jean Chatzky

[question everything]

(Cross Posting from Personal Finance)

https://www.democraticunderground.com/11215107

What can you do when a money manager won't accept an essential estate planning document? Kristen McDermott of Fryeburg, Maine, needed an answer. McDermott, 58, a professional gardener, told me she had power of attorney (POA) for her mother, Leslie Kremer, 85, who has dementia. Kremer’s bank and former employer honored that POA, which Kremer granted 14 years ago giving McDermott legal authority to manage her mother’s finances.

But two financial companies — Vanguard and USAA — wouldn’t let McDermott act for her mother. She had called, supplied documents, called again — and gotten nowhere.

(snip)

First, let’s clarify: Powers of attorney aren’t all the same:

A general POA allows a designated person to handle all financial matters on your behalf.
A special or limited POA is for a specific purpose, such as having someone sign for you at a real estate closing.
A durable POA is in force at all times.
A non­durable POA ends if you become incapacitated or disabled.
A so-called springing POA goes into effect only if you become incapacitated.

McDermott had a durable POA, so she thought she was set.

(snip)

Vanguard’s version of a POA is called the Vanguard Agent Authorization form, which the company says was designed to be valid in the face of state-by-state variations in POA laws. Presumably, if Kremer had found it among the various forms on Vanguard’s site, filled it out and submitted it prior to the onset of her dementia, McDermott would now be able to access her mother’s account.

(snip)

Regrettably, McDermott’s problems were fixed only after I called public relations departments at USAA and Vanguard.

https://www.aarp.org/caregiving/financial-legal/info-2023/why-banks-refuse-poa.html

[marybourg]

1. This is a common problem with

financial institutions. Vanguard, especially, is notorious in this regard, ignoring even Pennsylvania State law. But it’s not very difficult to forge a simple document like a POA, or to continue to use one that has been rescinded by the principal. Most banks - and -Vanguard - want you to use their own forms, for your protection and theirs. A revocable trust is much more acceptable to financial institutions, but generally costs more.