Financial Power of Attorney Frustrations

Signing a financial institution’s power of attorney can resolve problems.

A power of attorney is the delegation of decision-making authority over an individual’s property to another. The person delegating the authority is called the Principal, and the person receiving the authority is called the Agent. Delegating authority can be for incapacity planning or for convenience. The agent acts in financial matters for the principal’s benefit. For example, the agent can deposit or withdraw money from bank accounts, buy or sell securities, operate or terminate an ownership interest in a business, purchase insurance, pay bills, lease or sell property, apply for government benefits, pay taxes, etc.

For the most part, powers of attorney work well and accomplish their intended purpose. Sometimes, however, problems arise when you present a power of attorney to the IRS, banks, or other financial institutions, who may hesitate to accept the power of attorney. The law states that institutions can be held liable for refusing to accept an acknowledged power of attorney. Nevertheless, institutions frequently cite their internal policies as the reason for their refusal.

One way to solve this problem is to ask the bank, the IRS, or other financial institutions for their power of attorney form, which you can sign in addition to your general power of attorney. IRS Form 2848 authorizes another person to represent an individual before the IRS. You can name an accountant, attorney, or a family member as your representative. This form allows your agent to transact matters for you with the IRS.

By signing IRS Form 2848 or a financial institution’s power of attorney form, you will have less problems with them rejecting your power of attorney and you will be able to transact business with them more smoothly.

Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

August 2021