Answer:
Answer by: John Burnett, BOL Guru
I have heard of some jurisdictions in which a POA must be accepted. I'm glad I don't work in one of these places.
Opening a new account in a principal's name based solely on a POA, without knowing or dealing with the principal, is fraught with potential problems. A lot will depend on how well you know the attorneyinfact.
Opening an account that is jointly owned by the attorneyinfact without the presence of the principal is even more dicey.
Answer:
Answer by: Mary Beth Guard, BOL Guru
Unless the power of attorney specifically grants the attorneyinfact the power to make gifts from the principal's property or unless your state laws or court decisions would permit it the general rule is that it is not permissible. An attorneyinfact is supposed to be managing the property for the use and benefit of the principal not enriching himself. If the AIF is allowed to name himself as a secondary or joint account holder, he is, in effect, trying to give the money to himself.
If the AIF is simply trying to open a new account solely in the principal's name, then your big concern is whether the transaction and the POA itself are legitimate. There have been instances where X steals checks made payable to Y. X then dummies up an official looking POA which purports to be from Y to X. He goes in and opens a deposit account using that document and deposits the stolen checks. He then uses his power as POA to write checks to himself or in payment of goods or services for his own benefit. Once Y discovers what has happened, he sues the financial institution under various theories, such as negligence. Don't let it happen to you.
First published on BankersOnline.com 6/17/02
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