Can Someone with Power of Attorney Close Your Bank Account?
Often, individuals mistakenly believe that someone holding power of attorney 'has power over' them. In reality, the primary purpose of appointing a power of attorney (POA) is to grant an individual trusted to manage your financial and legal affairs, particularly when you are unable to do so. The agency granted by the POA document is strictly to act in the best interests of the principal, the person naming the agent.
Understanding Power of Attorney
When you give someone power of attorney, you designate them to handle various financial and legal tasks on your behalf. These actions are legally binding, regulated by state laws, and aim to protect your interests. The rights and responsibilities of the agent are clearly defined within the POA document. The agent must ensure that their actions align with the best interests of the principal.
Can an Agent Close Your Bank Account?
Yes, if someone has been granted power of attorney, they generally have the authority to manage your financial affairs, which might include closing your bank account. However, the scope of this authority depends on the type of power of attorney granted:
General Power of Attorney
A general power of attorney grants the agent broad authority to handle a wide range of financial matters, including closing bank accounts. This type of POA is comprehensive and allows the agent to make significant decisions on behalf of the principal.
Limited or Special Power of Attorney
A limited or special power of attorney specifies certain powers and may not include the authority to close bank accounts unless explicitly stated within the document. The extent of the agent's authority is defined by the principal’s wishes, and any actions beyond the specified powers would require additional authorization.
Ensure Your POA Is Approved and Defined Clearly
It is crucial to understand and review the terms of your power of attorney document. This will help you know what authority the agent has been granted. Additionally, financial institutions typically have their own policies regarding power of attorney and may require specific documentation or proof of the agent's authority to take certain actions. Be sure to familiarize yourself with these processes to prevent any misunderstandings or complications.
Revoking or Removing the Agent’s Authority
If you find that you wish to remove the authority of someone who has been granted power of attorney, you have options. If the POA was originally granted voluntarily, you can revoke it by simply obtaining a new document. However, if the POA was granted through a court process, such as when the principal has been determined to be incapacitated, revocation may be more challenging and require legal intervention. In such cases, you may need to seek assistance from a legal professional to navigate the process.
Conclusion
Power of attorney is a powerful but important tool that can provide peace of mind for both the principal and their chosen agent. Understanding the scope of authority granted by the POA document and the rules governing financial institutions will help ensure that your affairs are handled appropriately. Should you ever feel that the agent is not acting in your best interests, legal avenues are available to address the situation.