Ask the Expert: When bank ignores power-of-attorney

I have my aunt's power of attorney. She now lives in California in a long-term care facility near me. She has $35,000 in an account at a branch of a New York savings and loan, and she needs these funds to survive. For three months, the bank branch has refused to give me access to her account or even to put me or my attorneys in touch with their legal department. What should I do?

Tell the branch manager that as the individual responsible for this decision, he will be deemed personally liable, along with the bank, for violating New York law by failing to honor your power of attorney. That should get you a return call from a bank attorney.

You've described an outrageously common problem. Each bank has its own power-of-attorney form, and many banks routinely refuse to honor any other form, says Stephen J. Silverberg, an East Meadow estate lawyer. (Readers who want to spare their relatives from this hassle should sign the bank's power-of-attorney form as well as their own.) But such refusals are unlawful unless a bank has actual knowledge that a document is fraudulent - and New York law now lets you seek damages against banks that reject a valid power of attorney. The fact that your aunt is no longer a New Yorker is immaterial. New York specifically recognizes properly executed powers of attorney from other states. (It's in Section 5-1512 of the General Obligations Law.) Moreover, the bank has nothing to fear by complying with the law: As your aunt's appointed agent, you agree to hold them harmless from any damages resulting from their acceptance of your power of attorney. "That's standard language in a power-of-attorney document," Silverberg says.

The bottom line: You can now bring legal action against banks that refuse to honor a valid power of attorney.

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