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Is the financial power of attorney you have usable?

Do you have your parents', grandparents' or sibling's financial power of attorney (POA)?

It isn't uncommon for close relatives to sign documents that allow the other person to take over his or her affairs if he or she is suddenly unable to handle business him or herself. In some cases, it may even be necessary -- especially if a sibling in the military is at risk of suddenly being called back overseas.

Someone has to pay the bills, handle the taxes and manage the banking.

Well, before your brother or sister gets shipped overseas or your grandfather develops dementia, you'd better head to the bank. That POA you're holding may just be useless paper as far as the bank is concerned.

Doesn't sound possible? It is. And, it has also become an increasingly frustrating and complicated problem for consumers.

Even if your durable financial power of attorney is a legally executed document, drafted by a probate and estate attorney and follows all the right rules, banks are becoming increasingly particular about them.

They don't want just any POA form -- they want a state-specific POA form. Many go further -- they'll only accept their own, bank-designed, POA form.

Sometimes, they even want more -- like statements from multiple doctors testifying that the subject of the POA is incapable of handling his or her own funds. That becomes a separate nightmare if the subject of the POA is only physically unable to do his or her own banking.

Consumer protection experts say that the banks are only trying to protect consumers' assets from potential theft. Critics say the banks are really concerned about their own liability.

However, the banks can create real headaches for the people trying to help those consumers. Usually, the person holding the POA doesn't realize it won't be accepted until he or she needs to use it. Legally, this creates serious problems for the person holding the POA. The POA needs to be signed while the signer is still mentally capable of making his or her own decisions. In many cases, he or she is not.

If you run into this problem, you may get resolution by simply going up the ladder until you get to the executive level and someone finally has the authority to make a rational decision. In others, you may have to seek legal assistance to get you out of the jam if no one is willing or able to budge.

Source: The New York Times, "Finding Out Your Power of Attorney Is Powerless," Paula Span, accessed Dec. 14, 2017

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