“The Bank told me your Power of Attorney is no good!”, says the angry child of your Client. For an attorney who strives to do the best job possible for her clients, this comment really hurts.
“No. There’s absolutely nothing wrong with the Power of Attorney I drafted for your Mother. It is a valid document and a very important tool in your Mother’s estate plan. Yet, no one should try to use a screwdriver when you really need a hammer to do the job.”
In the next few paragraphs, I’m discussing what may appear to be a small nuance, but it has been occurring more and more frequently, particularly when an Aging Parent merely wants a little help in balancing the checkbook or paying the bills. Let’s decipher why the Bank said what it said.
On several occasions, we hear from the adult child who takes the Power of Attorney (POA) to the bank and wants to be added to Mom’s bank accounts. There’s nothing sinister here. And Mom asked for the little extra help with balancing the checkbook and paying the bills.
When the bank says “no”, and you’re obviously frustrated, it’s because you’ve used the wrong tool Mother has put in place for you. Your Mother created a revocable living trust (RLT) and re-titled her bank accounts into the trust. This necessary task of “funding the trust” means there’s no probate on these accounts upon Mom’s demise. This is less hassle and less cost for you. Yet, it also means that only “a Trustee” can exercise control over the bank accounts owned by the trust. Not someone who has Power of Attorney.
Children with Aging Parents! Have the talk with your parent. Thank her for naming you as an important actor (the back-up or successor Trustee). Yet, clarify that you are merely a back-up with no ability to help until your Mother voluntarily gives up her control, or her control is taken away from her when she is unable to handle her own affairs.
What tool is needed now? The appropriate tool needed for you to become a shoulder-to-shoulder helper for your Mother is a simple Amendment to Mother’s RLT. If you are named as a Co-Trustee, you’ll have the correct tool. And, the bank will put your name on Mother’s trust accounts. Mother will still be on the account and Trustee too. She hasn’t had to resign and she hasn’t been declared mentally incompetent. With the amendment, you’ll be side-by-side to pay her bills and balance her checkbook to whatever extent she needs it. Take the amendment to the Bank and then they’ll add you to Mother’s bank accounts.
