The Best Made Plans – When Estate Plans Break Bad

2 older clients meeting with an attorney

Your Estate Planning attorney works with you to develop a comprehensive package to cover as much as he or she can foresee as things that you may face during the rest of your life as well as after. An Estate Planning attorney uses the experience of working with other clients, the experience and brainstorming sessions with other Estate Planning attorneys, and evaluation of changes and trends in the law to create your Estate Plan.

It allows you to breathe a sigh of relief when completing the signing of all the documents, to feel the weight of a major task come off your shoulders, and for some it helps people sleep at night.

Then, the unforeseen makes itself visible…

The too-big-to-fail banks of our world each have thousands and thousands of customers visit their teller windows – yes there are still tellers. On any given day any one those institutions may have a thousand Powers of Attorney across their breadth of branches. Tellers have a varied level of experience and probably even less understanding of liability for using an inappropriate Power of Attorney. Any bank, local or international, needs policies to facilitate customer service functionality. So, a bank (or credit union for that matter) leaves the decision to accept a Power of Attorney at the teller level, may be a key staff member at each branch, or up-the-chain, in the corporate’s hands.

Clients from two different banks recently brought in forms to have their Power of Attorney certified and notarized in order to be used. Well that’s convenient for the attorney-in-fact who is running around to take care of an incapacitated spouse, parent, or child and is trying to make a deposit before closing.

I hope there are enough funds to cover what ever hits the account before the person figures out what he or she needs to do and someone to help it get done.

Another very large bank made a blanket policy that it would not accept any Powers of Attorney, but would instead require clients to complete their very own, specific Power of Attorney form in order to do business with them.

That may not seem like a big deal. But return to the scenario above where spouse/parent/child is incapacitated. That person does not have standing (i.e., CAPACITY) to sign a legal document. Especially perplexing is the person who put together an extensive, well-thought Estate Plan to avoid probate, guardianships, conservatorships and put someone in charge of his or her choosing, well in advance of this moment.

When big bank America makes a policy decision in far, up-reaches of a major metropolitan skyscraper, none of those saying, “This will be a great way for us to protect our interest,” has to face a customer across the counter who is just trying to care for a loved one in a diminished mental or physical state. It may not help, but try to remember, the teller who basically just wrecked your day and your loved one’s plan, did not make the policy. The teller is the one stuck with the policy.

This is not a statement to try to convince or even recommend bailing on big banks. Instead, it is something else for you to consider when organizing your plan. Ask about your banks policy.

This possibility is another feather-in-the-cap of a properly funded revocable trust with disability provisions. An account within a trust does not need a Power of Attorney to manage, even when the person who created the trust is disabled or deceased as the trust owns the asset. A trust does not die or become disabled. Learn more or if you are in Indiana or Illinois, call for an appointment to learn how to create or review your Estate Plan.

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