Question: If my mom signed the Power of Attorney provided by the bank, does she need to sign any other Power of Attorney?

Answer: This is a question I am often asked, since many if not all banks have their own Power of Attorney forms. The short answer is yes, it is important that your mom sign a comprehensive Durable Power of Attorney in addition to the document provided by the bank.

A review of the purpose of this document will be helpful to understand why it is important to sign this advanced directive. A Durable Power of Attorney is a document that allows your named agents to make financial decisions on your behalf and assist in taking care of your daily financial obligations. A Power of Attorney will be practical should your mom become incapacitated or not be able to handle her accounts or assets at any time. Without a Power of Attorney, it may be necessary for you or one of your mother’s loved ones to petition the court to be appointed guardian of your mother in order to make decisions for her if she is incapacitated. The guardianship court process is expensive, time consuming, and invasive into your family affairs. This is why it is important that your mother name an agent under a Power of Attorney before any possible future disability or incapacity.

It is also imperative that the Power of Attorney your mother signs be a comprehensive document. While the Power of Attorney your mother signed with the bank could be valid, it may only allow the named agents to act with regard to that specific bank and often only on a specifically designated account at that bank. Additionally, changes in the law regulating Powers of Attorney mean that if a power is not specifically listed in the document itself that the agent does not have that power. In other words, a Power of Attorney is only as good as the powers listed within the document.

In my experience of preparing Power of Attorney the inclusion of numerous expressly given powers has proven crucial for effective estate planning and organizing long-term care for my clients. Should your mother apply to Medicaid to cover her long-term care costs, the Power of Attorney document will become extremely important for the application process. This is because her agents will be able to assist in obtaining the documentation needed as well as take the actions necessary to become eligible to receive medical assistance through the Medicaid program. It is likely that the Power of Attorney your mother signed through the bank does not include a statutory gifts rider, which will limit the agent’s ability to complete a Medicaid eligibility plan. A comprehensive Durable Power of Attorney with a statutory gifts rider will allow an agent to transfer assets in order to effectuate the grantor’s Medicaid eligibility and protect his or her assets.