Power of Attorney FAQ
By: Source: AARP.org Date Posted: 2004-03-24 14:11:21
Can a bank or other institution refuse to honor a valid power of attorney?
State laws vary as to whether they penalize a third party for refusing to honor a power of attorney document which appears to be valid on its face. It would be necessary to prove that a third party honoring the document either knew or should have known that the document was a fraud or had been revoked in order to hold the third party liable for any loss to the principal. Whether a principal could sue for damage resulting from a failure of a third party to honor a power of attorney is uncertain.
The best answer to the question is to avoid the problem by being prepared. Principals should be certain to contact any financial institution where they have accounts, safe deposit boxes, securities and the like, as soon as the power of attorney is executed. Copies should be provided and any form that any of the institutions require of the principal or attorney-in-fact, such as authorizations or signature cards, should be executed. This generally avoids any difficulty.
It is also wise to have a power of attorney notarized even if it is unlikely that it will ever require recording. The notary seal will provide extra authentication for any wary third parties.
If I give a power of attorney to another, do I give up the right to manage my own affairs?
No. As long as a principal remains legally competent, he or she retains full control over his or her affairs. The principal may allow the attorney-in-fact to act or not at the sole discretion of the principal. A principal may cancel the power of attorney at any time without requirement of a reason.
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