In the past year or so I have had countless prospective clients call my office to see if I could help them because a bank would not honor a power of attorney. These powers of attorney were not just the cheap online forms or templates purchased at an office supply store, but very good ones written by attorneys. Good attorneys. Local attorneys.
Everyone involved in the process believed that the power of attorney document they either produced or purchased was proper and should work. At least two-thirds of the time I could find nothing deficient about these documents. They seemed to meet all the requirements of Washington law.
To help these clients, I usually had three options: go with the client to the bank to sort it out, advise them to use the bank's power of attorney form, or petition the court to compel the bank to honor the power of attorney.1 Often, the first option was unavailable because the reason the power of attorney needed to be used was due to absence or incapacity of one kind or another.
Compelling the bank to honor the power of attorney was far too expensive and time consuming, so lately I have found myself going to a lot of banks. There my clients and I wait while a bank manager sends faxes back and forth to corporate headquarters before saying something like, "Oh yeah, it does say _______."
This is as exactly as exciting and productive as it sounds. I got sick of banks giving people the runaround like that, so I did some digging into what banks require in their powers of attorney. What I found was rather disheartening, but first the good news. The good news is that, more often than not, the smaller the bank, the better the process of approving any power of attorney is. Small banks, on both sides of the mountains, are pretty good and usually all it takes is a quick phone call to sort things out if any problem arises.
Large, national banks are where the problems usually lie and my investigation leads me to believe that the reason these banks can be so problematic is that approval of a power of attorney is done on a case-by-case basis by the manager of the branch, if that decision can even be made on-site at all. If you are lucky enough to have a branch manager who has years of experience at that bank and has seen thousands of powers of attorney, chances are you will have no problem. On the other hand, if you have a bank manager who was recently promoted, is fresh out of business school, or is a lateral hire from another institution, you might have a problem.
The national banks I included in my investigation were Bank of America, Chase and Wells Fargo. I was surprised to find that every bank manager I spoke to at Chase and Bank of America was very forthright about what their institution's rules were. They read to me straight from their policy manuals and were very friendly and helpful.
The managers at Wells Fargo also were very friendly, but apparently it is against corporate policy to give out any information to an estate planning attorney other than that powers of attorney are approved on a case-by-case basis and that they cannot comment further. None of the managers I spoke to were able, per corporate policy, to speak to me on the record for this article, so you will just have to take my word for the veracity of my sources.
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