Many of our clients are aged and many of our clients are fiduciaries for other people in roles such as Agent under Power of Attorney, Estate Administrator or Executor. NJ Rev Stat § 46:2B-19 (2013) In a typical week our clients have to ask banks to provide documents and services that are required to enable the client to file an application for public benefits, pay expenses for an estate, transfer stock held by a deceased person, answer questions posed by the caseworker on a Medicaid application, or open and close bank accounts using a Power of Attorney. It seems like each year, the bank’s procedures become more onerous. For elderly clients it can be a maddening experience.
Here are a few problems that have been reported to us. (1) An executor of an estate in which the estate held bank accounts at a certain national bank which is related to an investment/securities firm needed to transfer stock. The transfer agent’s paperwork required that the Executor’s signature be Medallion Guaranteed. The bank wouldn’t provide their customer with the Medallion Guarantee because the estate hadn’t set up a brokerage account and only held bank accounts. (2) The person who is named as Agent under a Durable Power of Attorney (POA) which has banking powers attempts to transact business at a bank, such as getting their signature on file or opening or closing an account for the customer who had signed the POA.. Some banks demand a current authorization (clearly a violation of state banking law). Yet there is a presumption that a POA is still in effect and a third party can rely on it. NJ Rev Stat § 46:2B-8.3 (2013) and NJ Rev Stat § 46:2B-8.5 (2013) Since the principal is often incapacitated and cannot sign anything, the bank will renege but will demand that the Agent for the customer sign an Affidavit that the POA is in full force and effect. Although this may violate the law,NJ Rev Stat § 46:2B-8.3 (2013) this may not be too bad as long as the bank provides the form. However the personnel sometimes simply refuse to accept an older POA, and tell the customer to go get the necessary document on their own. (3) Further, some banks are now demanding that the Agent go back to the attorney who prepared the POA for a certification that it is a true original!! That attorney may be deceased or be inaccessible. This is a requirement that is clearly burdensome and unwarranted.NJ Rev Stat § 46:2B-13 (2013)
Executors needs to gain access to the decedent’s accounts so that they can pay the bills. For an estate that will be taxable, State banking statutes allow the bank to release up to half of the account to the Executor in advance of receiving the tax waivers from the State, and also allow the bank to issue a payment directly to the Division of Taxation. (4) Some banks are refusing to release any funds without receiving a tax waiver first. (5) Other banks will only deliver the tax check directly to the treasury, which means the Executor can’t control the process — yet the Executor is personally liable for payment of the taxes if the estate doesn’t do so.
(6) People who are filing a Medicaid application to pay for nursing home care have to produce 5 years of bank records and cancelled checks (for the look-back) to support the application. Some banks charge $5 a page, and $5 for every cancelled check copy. The application is being filed for a person who is out of money. These fees could add up to a thousand dollars. Who can pay this? If the Agent under Power of Attorney or the next of kin is doing a good deed by preparing and filing this Medicaid application, why should they be expected to pay such fees? What about the aged spouse who is also only allowed to retain limited assets when applying for Medicaid for their ill spouse? Can they be expected to argue with a bank about such fees, or confront them and ask for a waiver?
These are only a few of the more common examples. Government agencies, brokers, and other entities are becoming more particular about the documentation they require, but many procedures are overly burdensome, cause extensive delays, and are plainly unnecessary. If you are handling the finances for someone, you may wish to ask questions about these fees and procedures so that you can choose the institutions that will serve your needs and will facilitate rather than hinder your efforts.
For legal advice and advocacy concerning elder care or your responsibilities as a fiduciary call us at 732-382-6070