You may believe that by assigning someone to act as your personal agent to handle your financial affairs with power of attorney, you have safeguarded your financial future in the event you suffer incapacitation and cannot make decisions for yourself. However, it is possible that an Iowa bank or other financial institution may actually reject the person that acts on your behalf. How can this happen? According to Forbes, there are a number of reasons why.
Bureaucratic entanglements can be an issue. You may have worked out a legal power of attorney document that spells out all the powers of the agent. However, just because your agent has the document in hand does not mean every financial institution will recognize the document as valid. Some banks require that a power of attorney arrangement be worked out on their own forms. You may have to complete separate forms for each institution that holds your assets. Banks may also require particular language in a power of attorney agreement.
Some institutions may reject a POA arrangement due to time considerations. They may want the agreement to have been made within a certain time frame. In recent years, many institutions refuse to recognize a POA if it is more than six months old. These institutions may require the principal, the person who assigned the POA in the first place, to affirm the document at certain time periods if the document has not been employed.
Institutions also require identity verification of an agent offering a POA. While some institutions will recognize a driver’s license copy as sufficient, others will require more identification before accepting a POA. It is best to attain a list of all required identifications from a bank or a firm so that the agent can be prepared. If not, a bank can tie up the agent for a while as the agent tries to prove his or her identity. Sometimes an agent may take the matter to court to force the institution to accept the POA, but this can eat up time and legal fees, plus there is no guarantee the court will rule in favor of the agent.
This article is intended to inform the reader about power of attorney and should not be taken as legal advice.