Many people assume that once they sign a Power of Attorney, their family is protected if they become incapacitated. Unfortunately, signing the document may not be the end of the process.
When an emergency happens, a bank or financial institution may require additional documentation, review the Power of Attorney, or have its own procedures before allowing an agent to access an account.
For families in Long Beach and throughout California, understanding how a Durable Power of Attorney works can help avoid unnecessary complications.
Why Can a Bank Question a Power of Attorney?
Financial institutions have procedures designed to protect customers and accounts from fraud and unauthorized transactions. As a result, an institution may ask questions about a Power of Attorney, request additional documentation, or require its own forms.
This can create frustrating delays when a family needs immediate access to funds for mortgages, medical expenses, insurance, or other bills. The goal is to make sure your estate plan is prepared to function when your family actually needs it.
5 Ways to Prepare Your Power of Attorney
- Check With Your Bank
Ask your bank or financial institution whether it has specific procedures or forms for Powers of Attorney. Addressing these issues before an emergency can make things easier for your agent.
- Keep Your Documents Current
Review your Power of Attorney periodically. Your finances, relationships, assets, or choice of agent may have changed since the document was signed.
- Make Sure It Is Durable
A California Durable Power of Attorney is designed to continue providing authority in the event of incapacity, depending on its terms.
- Clearly Define Your Agent’s Authority
Your document should provide the powers your agent may need to manage your financial affairs. The appropriate authority depends on your individual circumstances.
- Coordinate It With Your Estate Plan
A Power of Attorney is only one part of an effective incapacity plan. Your plan may also include a revocable living trust, advance health care directive, beneficiary designations, and appropriate asset ownership.
How a Revocable Living Trust Can Help
A properly funded revocable living trust can provide another way to manage assets if you become incapacitated. When assets are owned by the trust, a successor trustee may be able to manage those assets according to the trust’s terms. A living trust does not necessarily replace a Power of Attorney. Instead, the two can work together as part of a broader estate plan.
Three Things to Check This Week
If you already have a Power of Attorney:
- Ask your bank whether it has specific requirements.
- Review your documents to make sure they still reflect your wishes.
- Check your asset ownership to determine whether important assets are individually owned or held in a trust.
Small steps now can help reduce problems for your family later.
Call us – we are your local Long Beach Estate Planning Attorney and Law Firm to find out more!
Estate planning is about more than signing documents. Your plan should be designed to work when you are no longer able to manage your own affairs. If you live in Long Beach, California, and are unsure whether your Power of Attorney and other estate planning documents are properly coordinated, an estate plan review can help identify potential gaps before an emergency occurs.
This article is intended for general educational and informational purposes only and does not constitute legal, tax, immigration, or financial advice. Estate planning laws and individual circumstances vary. Consult with appropriate qualified professionals regarding your particular situation.