Broker Check

Avoid Embarrassment - Delay - Expense: Keep your Durable Powers of Attorney updated

| May 05, 2016
Emergency Planning

Financial firms behaving badly:
Having a perfectly legal POA is only half the battle

Let's assume you and your spouse / partner / family members have properly drafted POAs (Durable Powers of Attorney) so that someone can make decisions about your money if you are incapacitated and unable to communicate your own wishes.  This is not a legal or lawyer mistake.  It is financial firms behaving badly.  Suppose you become incapacitated and you / your family needs a withdrawal from your IRA / 401k.  There is no such thing as a "joint" IRA or 401k.  So even if your trusted Financial Advisor is a daughter / son / sister / brother, a POA is still required for someone else to make a withdrawal.  (She could lose her license otherwise.  Or the custodian could refuse to honor the instructions.)  Even if the POA is on file, if it was drafted more than 2-3 years ago, the firm / bank / brokerage / fund company / custodian holding the money might still refuse to honor it, thus requiring a court ordered competency process leading to embarrassment, delay and additional expense.  There is little consistency.  Contact all your providers including checking & savings.  Demand they confirm in writing that they will honor your POAs. Ask how long they will honor them before they require an update.  Keep their response on file.  Update your POAs as needed – wash – rinse – repeat -- because the providers change the rules frequently and independently of each other.  Don’t take my word for it.  Email or call and ask.  Google POA problems.  I got 62,000,000 hits.