Santa Clara Estate Lawyer: What Should I Do if the Bank Says My Power of Attorney is ‘Too Old’?

While a power of attorney (POA) does not technically expire unless it’s revoked by the person who created it, you may run into a situation where a bank or a brokerage firm refuses to accept the document because it’s “too old.” You may also hear the phrase, “the document is stale.”

So, what does this mean, and what should you do if you encounter this situation?

First, it’s important to understand why a bank may reject a perfectly legal power of attorney in the first place. Unfortunately, there’s not a consistent policy on the matter, as each bank has different rules regarding the age of the power of attorney that it is willing to accept. While some banks will accept a document that was created decades ago, others may push back on taking a document that’s only six to twelve months old.

The concern is that accepting older documents opens the bank up to liability if the person who created the power of attorney has passed away and the agent is using the POA without really having the right to. There’s also a possibility that the person who created the power of attorney has since revoked the older document and created a new form that names a new agent. The bank would have no way of knowing that such changes have been made, and an older document then serves as a “red flag” for the bank to dig deeper and confirm that the agent before them actually has the rights they say they do.

Typically, when these situations arise, the banks will require more information. They may require the agent to sign an affidavit stating that the power of attorney is current and in full force, and in some cases, they may even contact the person who created the power of attorney (the principal) to confirm the details. Obviously, the latter could be a problem if the person who created the document is incapacitated or otherwise unable to communicate their wishes.

In order to avoid these unnecessary headaches and hurdles, we generally advise our clients to come back and meet with a Santa Clara estate lawyer every 1-3 years to have their power of attorney “refreshed.” It’s an inexpensive and easy process and helps to ensure that the document meets current standards required by most financial institutions. For agents who do not have this option (perhaps their loved one is now incapacitated), contacting an estate planning attorney may be necessary to work out any issues that the bank may have with the document.

If it’s been a while since you’ve “refreshed” your power of attorney, or you are an agent who’s run into a snag with a bank and you want to know what your next steps should be, please feel free to contact us at (650) 422-3313 to schedule an initial meeting with a Santa Clara estate lawyer.