Banks take the welfare of their clients very seriously, but they do not monitor all transactions that might be done by a client’s Attorney, particularly in an online or telephone banking environment. That is why it is so important to select your Attorney carefully. If an Attorney’s transaction comes to the attention of the bank and it appears unusual – for instance, if the Attorney pays substantial amounts to him or herself – the bank may try to confirm the transaction with you if possible (if you have capacity), ask the Attorney for additional information to better understand the transaction, or decline the transaction.
What do banks look for in a POA?
Generally, banks will accept a POA that meets applicable requirements and gives the Attorney the ability to conduct the desired financial transactions. The POA may be general or limited or restricted in some way, as long as it permits the types of transactions you expect your Attorney to do. (Some banks have a form of POA you can use. Bank policies do not require you to use that form.)
Ideally you should consult a legal professional for advice on drafting a valid, general POA. The POA must meet all provincial or territorial requirements. These requirements vary from province to province. In Ontario, for example, the Substitute Decisions Act requires that:
- you, the grantor of the POA, must be capable – the Act sets out seven indicators of capability,
- the POA must be witnessed by two individuals, in your presence and each other’s, and
- the witnesses cannot be the named Attorney, the Attorney’s spouse or partner, your spouse or partner, your child or a person you treat as a child, a person whose property is under guardianship, or anyone under the age of 18.
Why would my bank refuse to act on a POA?
Generally, banks carry out the instructions of your Attorney based on your valid POA. There are circumstances; however, when your bank may refuse to do so, including if:
- it doesn’t meet the applicable legal requirements; for instance, a foreign POA may not be recognized under the law of the province or territory where your accounts are located,
- it is a limited POA that authorizes your Attorney to do only certain transactions (for example, deposit funds to and pay out from your bank account) and the Attorney tries to do something else (e.g. taking out a loan in your name),
- it has been issued for a limited period of time and that time has passed,
- you have more than one POA and the instructions are in conflict,
- you die, - POAs are only valid while you are living
- your Attorney instructs the bank to change the ownership of the account (for example, to make your account joint with your Attorney) unless the POA specifically permits your Attorney to do so,
- your Attorney instructs the bank to appoint or change the beneficiaries on any of your RRSPs or RRIFs, or
- certain transactions appear to be for your Attorney’s own benefit (including large cheques payable to your Attorney, large cash withdrawals by your Attorney, and large transfers from your account to your Attorney’s account), unless the POA specifically permits your Attorney to use your money for his or her own benefit.
What can I do if the bank refuses to accept my POA?
If front-line employees have concerns about your POA or your Attorney’s instructions, they are to escalate the matter for review to more senior staff within the branch and/or to other experts within the bank. Usually, the review can be accomplished internally within a few days. In some cases, however, particularly when conflicting or inadequate evidence is presented to a bank, the bank may require a court order to resolve the matter.
If your POA or your Attorney’s instructions are escalated for review, bank staff normally advise the Attorney that the POA/instructions are being escalated for review and how long this review will take. Following the review, if the bank decides that it cannot act on the Attorney’s instructions, it will state why and, if appropriate, what needs to be done to move forward.
Depending on the reason for rejection, there are several steps you or your Attorney may take including:
- If you are still capable:
- doing the transaction yourself,
- creating a new POA,
- obtaining a legal opinion/confirmation to clarify any problems in the POA document,
- obtaining a doctor’s letter confirming that you were mentally capable on the date the POA document was signed and that you understood the concept of appointing a POA,
- if you are not mentally capable:
- applying to the court. Your Attorney or some other interested person can apply to the court for appointment as your guardian/trustee.
You or your Attorney can also make a complaint to the bank’s Client Care Department or Ombudsman Office, or retain a lawyer. See Resolving Problems with your Bank.
What about bills that need to be paid?
Banks generally allow payment of bills related to your personal living expenses (e.g. nursing home bills, rent, utilities) from your assets held with the bank even where it has questions related to a POA, your Attorney’s instructions or your capacity. Your bank will try to take appropriate steps to reduce inconvenience while any issues are resolved.
If someone brings your bills to the bank to be paid, banks may consider allowing payment even without a POA – usually after trying to speak with you.
This text only provides general information and does not constitute a legal opinion. Since the POA rules vary between provinces, the CBA strongly encourages you to seek advice from a legal expert before making any decision in these matters.