What is a power of attorney?
A power of attorney is a legal document giving a person (known as the agent or attorney-in-fact) broad powers to manage matters on behalf of another person (known as the principal). Under certain circumstances, Bank of America allows agents to be added to a principal's account (if you're a Merrill Lynch or Private Bank client and have questions regarding power of attorney and your accounts, please contact your Advisor for assistance).
Is there a fee to add a power of attorney agent to my account?
No. Bank of America does not charge a fee to add a power of attorney agent to your account (if you're a Merrill Lynch or Private Bank client and have questions regarding power of attorney and your accounts, please contact your Advisor for assistance).
Are there different types of power of attorney documents?
Yes. A power of attorney can be durable or non-durable. A durable power of attorney remains effective after the principal becomes incapacitated while a non-durable power of attorney terminates when the principal becomes incapacitated.
A power of attorney may also be designated as springing, which means that the power of attorney doesn't take effect until a specific event happens (incapacity, for example). A power of attorney may also contain limitations and restrictions on the types of transactions an agent may perform: A general power of attorney typically gives broad authority to the agent while a limited power of attorney typically provides narrow authority to the agent (such as granting authority only for a specific real estate transaction).
What are the most common reasons for needing a power of attorney?
Executing a power of attorney document may be helpful in a variety of ways. The power of attorney can permit an agent to act on the principal's behalf in financial matters such as filing taxes, selling property, refinancing a mortgage and depositing or cashing checks. With a durable power of attorney, the agent is permitted to continue handling the principal's financial affairs after the principal is determined to be incapacitated.
Is a person being a co-owner on my account the same as that person having power of attorney?
No. In a joint account ownership situation, any co-owner has full access to the account, including the ability to make withdrawals and pay bills. If one co-owner passes away, the other co-owner owns all funds in the account. With a power of attorney, the ways in which the individual can conduct transactions can be specific and limited. See what's needed to add a co-owner to your accountSee what's needed to add a co-owner to your accountSee what's needed to add a co-owner to your account
Is a person being a trusted contact on my account the same as that person having power of attorney?
No. A trusted contact is an individual age 18 or older who is identified by you as someone we're able to contact about your account for any of the following reasons:
- To address suspicious financial activity on your account
- To confirm specifics of your current contact information
- To confirm your health status
- To confirm the identity of any legal guardian, executor, trustee or holder of a power of attorney
It's important to know that designating someone as a trusted contact does not give that person the authority to gather information or conduct account transactions on your behalf.
To add a trusted contact to your account, schedule an appointment in a financial centerschedule an appointment in a financial centerschedule an appointment in a financial center.
I'm a trustee on a trust account. Can I use a power of attorney to name an agent to act on the trust account?
A delegation of a trustee's power may be subject to state laws and limitations in the trust agreement. Consult with your legal advisor to determine any legal requirements (in the law or in the trust agreement) and the appropriate language for including a delegation of a trustee's power in a power of attorney. As with other requests, we will need to review and approve the documents, which may include the trust agreement language permitting delegation of trustee duties.
Is an account with an agent appointed in a power of attorney the same thing as an account with one or more payable on death beneficiaries?
No. Sometimes referred to as a Totten trust or an in trust for (ITF) account, a payable on death (POD) account is an account ownership type in which the current account owner names one or more POD beneficiaries who will take ownership of the account funds upon the account owner's death.
Does an agent have the same authority as a POD (payable on death) beneficiary?
No. Once a power of attorney document is executed and accepted by the bank and the agent is added to the account, the agent is authorized to act on behalf of the principal during the principal's lifetime, according to the powers that the principal has included in their power of attorney document (unless the principal revokes the power of attorney or until the principal passes away).
A POD beneficiary, on the other hand, does not have any authority over the account or the funds in the account until the owner has died. At the death of the account owner, the POD beneficiary owns the funds in the account. An account owner may add, remove or change beneficiaries on the account at any time.
(Note: Despite the difference in the roles of an agent and a POD beneficiary, a principal may name the same person as agent and beneficiary.)