A Power of Attorney (“POA”) is a legal document that empowers another adult, such as your spouse, family member, or close friend, to manage your financial and property matters. This authority is particularly useful when you are incapable of managing your own affairs due to incapacity caused by mental or physical illness, old age, or some other reason. The person you authorize to act on your behalf is referred to as your “attorney-in-fact.”
But how do you know whether your bank or other businesses will accept your Power of Attorney? Perhaps more importantly, what happens if a bank or business refuses to accept your Power of Attorney and speak with your attorney-in-fact?
Will Banks and Businesses Accept My Power of Attorney?
In Minnesota, banks and businesses are generally required to accept your Power of Attorney, so long as the attorney-in-fact provides them with a certified copy of a validly executed Power of Attorney. You should keep the original Power of Attorney in a secure and easily accessible location, such as a home safe or lockbox, known only to trusted individuals.
What Makes a Power of Attorney Valid and Effective?
To be valid, your Power of Attorney must contain specific information identifying the name of the principal (i.e., the person creating the Power of Attorney and granting the attorney-in-fact the authority to act), the nominated attorney(s)-in-fact, the type of powers granted, when the power of attorney will be effective, and any other information required by statute or law.
Additionally, your Power of Attorney must be dated and signed by you in front of a notary public. The document must be dated and signed by your attorney-in-fact too, but your attorney-in-fact is not required to appear in front of a notary public.
The Minnesota legislature created a Statutory Short Form Power of Attorney document, which is designed to meet all statutory requirements for a valid Power of Attorney and to be shorter and easier to complete than a traditional Power of Attorney. When it comes to completing your Statutory Short-Form Power of Attorney, we recommend that you consult with an attorney to help you understand the legal terms and implications of each section of the form. The attorney can also provide notarization services to ensure the document is legally effective.
What Happens If a Bank or Business Refuses to Accept My Power of Attorney?
Banks and businesses have to tread carefully when presented with a Power of Attorney. Powers of Attorney are powerful documents, and banks and businesses need to ensure they are accepting authority from the right person.
If a bank or business is refusing to accept the authority of your attorney-in-fact, we recommend that you, or your attorney-in-fact, first check to ensure that your Power of Attorney meets all the legal requirements in your state. Did you date and sign the document in the presence of a notary public? Did your attorney-in-fact date and sign the document? Did your attorney-in-fact present the bank or business with a certified copy of your Power of Attorney?
One reason why a bank or business may refuse to accept your Power of Attorney is because the document was dated more than five years ago. Unless your Power of Attorney sets an expiration date, this should not be a valid reason to refuse a Power of Attorney during your life. Unfortunately, we’ve heard of this happening.
Sometimes the bank or business doesn’t understand that the general language of the Statutory Short Form Power of Attorney document is more specifically defined elsewhere in Minnesota law, specifically Minnesota Statute Section 523.24. For example, the Statutory Short Form Power of Attorney document can grant to the attorney-in-fact the power to engage in “banking transactions.” Minnesota law further defines “banking transactions” as including the authority to access safe deposit boxes.
Your attorney-in-fact may need the assistance of an attorney who can contact the bank or business and clarify any misunderstandings the bank or business has about the validity of the document. If you’ve done your documents with our office, we can assist you with this by contacting us.
When to Seek Professional Help with Your Power of Attorney
As we navigate through life, there may come a time when we are no longer capable of making decisions on our own. This is where a Power of Attorney comes into play. A validly executed Power of Attorney will allow your attorney-in-fact to act on your behalf and manage your financial and property affairs when you are unable to do so.
While it may be tempting to create a Power of Attorney yourself, remember that a Power of Attorney is an important legal document that should not be taken lightly. Seeking the help of a professional not only provides peace of mind that your financial and property affairs will be properly managed in the future but also increases the odds that your Power of Attorney is properly executed and accepted by banks and businesses so that your wishes can be respected.
Consulting with one of our attorneys can help you create a valid and effective Power of Attorney that works for you. If a bank or business refuses to accept your Power of Attorney we can work with your attorney-in-fact to ensure your wishes are respected.