By Hannah F. G. Singerman, Esq.
Durable powers of attorney are forms that survive incapacity of the maker so that the elected power-holder can make decisions for the incapacitated maker. More plainly, a durable power of attorney for financial matters gives one person the power to make decisions for another person even when, and often only when, the person giving the power is incapacitated.
Powers of attorney can be general or limited, can start immediately or only after an event like incapacity, but their purpose is to appoint a person to uphold the financial wishes of the maker just like how the person appointed under a durable power of attorney for healthcare purposes would uphold the maker’s healthcare wishes. Any person over the age of 18 who is of sound mind can execute such a power of attorney.
Powers of attorney can be extremely helpful to financial institutions. Often times when a person becomes incapacitated, it is hard to determine who should be making important financial decisions on his or her behalf, and thus what to do with funds in an account and all the rights and responsibilities that come with holding an account. This can open credit unions and banks up to either liability if the wrong person is given access to funds, or frustration if family members see the financial institution’s actions limiting access as hindrance instead of caution.
Therefore, it could be extremely helpful for credit unions to discuss powers of attorney with their members at the inception of the relationship. Upon a member joining the credit union, the credit union can learn of any existing powers of attorney and keep records of such. Further, credit unions can explain powers of attorney to new members and encourage powers to be executed with copies given to the credit union to maintain in connection with the member’s account. Credit unions can educate new members about the importance of powers of attorney as well with materials and discussions.
Further, existing members can be sent periodic notices with their yearly statements, asking if a new power of attorney has been executed so that the credit union’s files can be updated. This is important because often with changing relationships and life, new powers of attorney are executed, for example upon marriage, divorce, or death of the power-holder. Credit unions can also send literature regarding powers of attorney to their existing members to encourage them to execute and notify the credit unions of good, current, powers of attorney.
If powers of attorney can be encouraged and records of such can be kept by credit unions, then, when and if a member becomes incapacitated, their membership can be maintained smoothly without the credit union being opened to liability and without the family becoming frustrated. Powers of attorney can streamline a member’s financial life no matter what happens to the member and strength the credit union/member relationship, so that everyone is satisfied.