Power of Attorney Initially Rejected ‐ In Error ‐ By Financial Institution
Unfortunately, financial institutions sometimes reject perfectly valid Powers of Attorney (POA). Often the rejection is for no good reason! Here is an example, and how it was successfully resolved.
Our St. Catharines office prepared a POA appointing the client’s three children as her substitute financial decision makers, with an “inter‐delegation” provision that provided them with maximum flexibility to use the POA, regardless of whether all three were present in the same place and at the same time. It stated, in part, the following:
“I authorize any one of my attorneys to delegate to any one or more of my other attorneys, all or any of the powers conferred on my attorneys … it being my intention that my attorneys shall be at liberty as between themselves to arrange for the management of my affairs entirely or in part by one or more of them as they see fit.”
When our client had a health issue, she contacted her financial institution to ensure that one of her children (with the knowledge and consent of the others) could do her daily banking. Shockingly, the financial institution refused to allow one child, alone, to exercise the power.
Our now distraught client contacted us for help. Michael Maddalena, the Managing Lawyer at St.Catharines, immediately faxed a letter to the branch manager, advising that
“This clause has been part of our standard precedent for many years, and we have never encountered any difficulty with it, until now.”
Michael also explained that this was a matter of legal interpretation, not branch policy or discretion, and asked that the matter be referred to their legal counsel for clarification.
Less than a month later, the financial institution (albeit reluctantly) accepted the authority conferred by the POA document.
"One lawyer’s letter did the trick!"
But for the Plan, would our client have bothered to pursue the rejection, or would all three of her children have just agreed to the major inconvenience of attending together, every time?
Submitted by Michael Maddalena,
St. Catharines Office