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I recently had the experience that a title company refused to accept a power of attorney because it did not contain the language “before I appeared …”. I thought it was obvious from other wording that the person granting the power of attorney was present before the notary, but this type of denial was important as the power was used to enable the mentioned broker to carry out a real estate settlement . The matter was taken up with them, but I wondered if, based on the experience, I should consider exploring the language in all of the documents.

Sometimes married couples wonder why a financial power of attorney should be required when all of their assets are already jointly titled and they have named each other as beneficiaries. Real estate is an example where financial power of attorney might be required, even if they are married couples. Another is when a spouse needs to access a disabled spouse’s retirement account. By definition, IRAs are individual retirement accounts and cannot be managed together.

From time to time we come across a situation where a bank refuses to accept a power of attorney. Never had it with title companies. For banks, it might be a matter of formatting or credentials, or the bank might want the person to use the standard form provided by the bank or financial institution. The possibility of a power of attorney being refused can be a reason not to simply pull a form off the internet and hope that it will be accepted.

Pennsylvania and other states have detailed notices and acknowledgments and other regulations about what language must be used to achieve certain purposes, with gift restrictions being just one example. If the document can be properly withdrawn and the person who gave the power of attorney is still available, then these issues may not be as problematic, but if the person can no longer sign or understand the document now as if they can be a big problem if you have dementia.

Pursuant to Act 95, a Power of Attorney Act passed in 2014, material changes were made to Pennsylvania law that changed the wording, as well as witness and other requirements and protections for the party granting the power of attorney. This emerged from a 2010 case, Vine v Commonwealth of Pa State Employees’ Retirement Board, 9 A.3d 1150 (Pa. 2010).

In Vine, a Pennsylvania state employee who was disabled after a car accident and stroke was given a power of attorney for her then-husband to sign. He changed her retirement options and later filed for divorce. The question was whether, after she recovered, would Ms. Vine be able to void her estranged husband’s option and seek benefits by presenting evidence that the power of attorney might be void due to its condition at the time it was signed. To everyone’s surprise, it turned out that this was possible and the years of searching for a compromise began. Banks obviously couldn’t investigate the background behind the signing of every power of attorney. Ironically, the Vine case didn’t even involve a bank.

Law 95 describes what a bank, financial institution, or other authorized party can and cannot do. It granted immunity to anyone who accepts a power of attorney in good faith without actually knowing that it is invalid. On the other hand, there is potential civil liability for refusing to accept a power of attorney that meets all requirements.

Sometimes, with great caution, it can be useful to have both your general financial authorization drawn up by your attorney and the standard form from that bank or financial institution on hand. One point to remember is to make them consistent.

There may be other considerations that you may need to discuss with your lawyer beforehand. For example, some banks and financial institutions reject a power of attorney that requires more than one agent to work together or that otherwise does not meet their standards. Should refusal to accept the document be combated? As always, the answer is “it depends”.

Janet Colliton, Esq. is a certified senior law attorney limited to senior law, retirement, life care, special needs, and estate planning and administration with offices at 790 East Market St., Ste. 250, West Chester, PA 19382, 610-436-6674Call through Mitel, [email protected]. She is a member of the National Academy of Elder Law Attorneys and with Jeffrey Jones, CSA, co-founder of Life Transition Services, LLC, a service for families in need of care. Also listen to the radio station WCHE 1520 “A Plan Ahead” on Wednesdays at 4:00 p.m. with Ron Ehman, Real Estate Ron, Broker and Next Home Signature Real Estate.

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