Wednesday, March 4, 2020

Your bank won’t honor your Power of Attorney…Now What?

Over the years, I have some clients tell me that their bank didn’t honor their Power of Attorney and they don’t know what to do. The stories are consistent, an adult child was named the primary agent for their elderly Mom, since Dad had recently passed. Mom has become immobile so that the adult child must manage mom’s financial affairs and fulfil their agent role under the provisions of Mom’s Power of Attorney. This scenario is exactly what the Illinois Legislature had in mind when they drafted the Illinois Power of Attorney Act.

            The purpose of the act is to recognize that everyone has the right to appoint an agent to make property, financial, and personal decisions throughout the principal’s lifetime, including during periods of disability. It provides a principal with confidence that a third party, like a bank, would honor the agent’s authority at all times. Lawmakers wanted to give principals peace of mind knowing that their affairs would be efficiently handled, despite any present or future infirmity. However, banks, in their desire to limit their own liability, frequently refuse to honor a validly executed power of attorney. This defeats the desires of a principal, who is unable to manage their personal matters. How will the adult child in the above scenario, help their mother pay bills? How will the adult child convince the bank to honor their elderly mother’s power of attorney? This is where an experienced attorney can help.

            The Illinois Power of Attorney Act gives the mother and adult child the ability to use an attorney to put some teeth into the banks refusal to act upon a validly executed document. The best method to take a bite out of the bank is by utilizing an attorney to enforce the Illinois Power of Attorney Act, specifically, 755 ILCS45/2-8(d). The statute states:

(d) each person to whom a direction by the named agent in accordance with the terms of the copy of the document purporting to establish an agency is communicated shall comply with that direction, and any person who fails to comply arbitrarily or without reasonable cause shall be subject civil liability for any damages resulting from noncompliance.

            The financial institution and even the banker personally may be liable to the agent and principal for any losses or damages resulting from the bank refusal to comply with the directions of a validly executed Power of Attorney. Once a client has contacted our office, we will work quickly to ensure the bank’s compliance with the Illinois Power of Attorney Act and ensure that the adult child in the above scenario can act on their mother’s behalf in the most effective  manner available. The Law Office of Jonathan W. Cole has the knowledge and the power to ensure the bank’s compliance, either through a simple communication, or by litigation, if necessary. Give us a call at (708) 529-7794. We can resolve this issue. 

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