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Email this7:51 am
October 21, 2013
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As mentioned on another thread (under Peoples Trust heading), I am concerned about some of the fine print with some financial institutions in regards to powers of attorney. It seems pretty clear from their Terms and Conditions that Peoples doesn't intend to deal with anyone in this capacity.
I wrote to Maxa and asked what their policy was, and received this answer: "MAXA financial does not offer power of attorney so we would be unable to accept instructions from anyone who is not on the account."
I will be asking the same question of some other institutions as well.
I find this state of affairs quite alarming. Even if one does give one's password etc to one's power of attorney, there is going to be a limit to their effectiveness. They wouldn't be able to write cheques, for example, in order to get the money out of the account and move it somewhere else, and many of these institutions do not have full-service electronic banking. Sounds to me like the money effectively becomes hostage to this kind of policy.
This should really be a big red flag, especially to those of us who are seniors. What if your spouse becomes ill and requires a caregiver but you can't get one for them because nobody can access spouse's money until he/she dies? There are myriad issues here.
It's a powerful argument to make your accounts joint if you are dealing with an institution which has these kinds of policies, although that is not a decision to be made lightly. But, of course, with registered accounts, you cannot, by law, make them joint.
And, even if they are joint accounts, that will not help if, for example, both of you are seriously hurt in an accident and neither one of you can act for yourselves. Somebody has to pay your bills but if the money is in an institution like Peoples or Maxa, they won't be able to. This is a recipe for a family disaster.
I am very disappointed in the apparent unwillingness of these institutions to deal with reality. I think I will be pulling my money out of some of these places as a result, as soon as I can. It's just too big a risk. I hope it doesn't turn out that I can't get decent rates because of it.
8:08 am
July 31, 2013
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Loonie, our family has all our accounts joint no matter how big or small the balances are and what the investment amounts are.
We make sure that all our real estate and all our accounts are registered as Joint Tenants with Right of Survivorship JTWROS and not Joint Tenants in Common JT TEN.
Quebec does not recognize JTWROS, so you this is not an option for Quebec residents.
We also make sure we have all the necessary beneficiaries up to date for our RRIF's, RRSP's, TFSA's, RESP's, life insurance and other protective insurance policies.
We never trusted using power of attorneys established through banks, financial institutions, investment accounts etc.
As for wills and power of attorneys, we already have one made for each of our family members through our lawyer.
We have a continuing power of attorney and a medical power of attorney for each of us. This covers everything we need in case or when something goes wrong.
We get these important documents reviewed when something major changes happen in our lives or within 5 years at the longest.
If there is a need to make new wills and power of attorneys, we just do it for the hundreds it costs.
Loonie, you don't want the government telling your family what to do with your property, money and family's property, money.
To all forum readers, always check with your lawyer first and get legal advice before doing anything, as every family's and personal situation is different.
Thanks, from SD2013.
8:28 am
October 27, 2013
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Loonie said
As mentioned on another thread (under Peoples Trust heading), I am concerned about some of the fine print with some financial institutions in regards to powers of attorney. It seems pretty clear from their Terms and Conditions that Peoples doesn't intend to deal with anyone in this capacity.
I wrote to Maxa and asked what their policy was, and received this answer: "MAXA financial does not offer power of attorney so we would be unable to accept instructions from anyone who is not on the account."
I will be asking the same question of some other institutions as well.
I agree this subject is an important one. Perhaps if/when various members here find out specifics, this information should be included in a column on the charts, e.g. heading POA (yes/no) recognizing that the POA heading probably should be asterisked with a footnote that recommends individuals check their own for specifics and nuances.
SD's comments above don't really deal with the specifics to this specific conversation. There are many legal and financial reasons not to have joint accounts. What I would suggest instead is people should not have all their assets in one institution. Spread savings, chequing, brokerage, etc. around to 2-3 institutions.
Even with some institutions accepting POAs, it can take a month or more to get them activated, in which case bills may need to be paid in the meantime. They may require notarized copies (or certified originals) and the completion of certain forms for a POA to be accepted and activated. This is especially true with brokerages (full commission and discount) as experienced by my brother and I with our mother's discount brokerage account.
8:50 am
July 31, 2013
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AltaRed and to all forum readers, I would never prepare any of my own and family's legal documents.
Power of attorneys, wills etc. are no different. As for having money in many financial institutions, accounts, I always stated that in my posts which just makes, good, financial common sense.
Also, this is why I put in my last post above that always check with your lawyer first and get legal advice before you do anything as everyone's situation is different.
We spoke with our lawyer and decided what was the best fit for us looking at the advantages and disadvantages which there always will be in any life's situation.
A forum full of information no matter how good it may seem, should never replace professional advice on preparing the necessary, legal documents for you and your family, Loonie.
Thanks, from SD2013.
8:58 am
October 21, 2013
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DUCA Credit Union, in Ontario, has the following statement in its Member Agreement online: http://duca.com/About/Listing/....._agreement
"You may appoint one or more attorneys to act for you in respect of an Account. However, we may refuse to accept the appointment in our sole discretion if it is not satisfactory to us, or we may refuse to honour any Account transaction made by an attorney (or by any committee, property guardian or similar representative appointed by a court to act for you in respect of an Account). If an Account is a joint Account, we may also refuse to honour any Account transaction made by an Attorney (or by any committee, property guardian or similar representative appointed by a court to act for you in respect of an Account) unless their appointment in respect of the joint Account has been agreed upon (in writing) by all Account owners. An Attorney will have access to the previous Account history and transaction details for the Account, and you agree to this access being provided."
I am pleased that they are potentially willing to deal with a POA, but it takes some guts to consider refusing to deal with someone who has a court order to represent you!
9:04 am
October 27, 2013
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SD, just because a POA might be made with all the expertise of a lawyer, the mere existence of a perfectly legal POA does not automatically mean institutions, in their T's and C's, accept POAs. Nor did any of us ever say anything about preparing our own POAs. Get off that track.
That said, provincial legislation may well cover the situation where a perfectly legal POA, containing specifics such as being Attorney over financial matters, has to be accepted by a financial institution regardless of the institution's fine print. That is perhaps what should be asked of both institutions, and one's own lawyer.
9:13 am
October 27, 2013
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Loonie said
I am pleased that they are potentially willing to deal with a POA, but it takes some guts to consider refusing to deal with someone who has a court order to represent you!
One other thing worth noting. Insitutions will often have T's and C's like this to protect themselves from fraudulent requests. My sons work for banks and they have seen some of the craziest stuff one can imagine with respect to so called 'legal representatives'. The key here, as you have pointed out, is to find out from your institution what they require in the form of a POA, and to perhaps have that paperwork in place. That is what my brother and I did for our mother. Now if we have to invoke the POA, the institution already knows and has the legit paperwork in place for us to invoke 'immediately'. What each of us does depends on the specific urgency/relevance/importance of an individual account.
9:19 am
October 21, 2013
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Implicity says, under "Legal" on the website, https://www.implicity.ca/OnlineBanking/AboutOnlineBanking/OnlinePolicies/Legal/ :
"19. DIRECT SERVICES ACKNOWLEDGEMENT – The Depositor acknowledges and agrees that...
anyone with access to the PAC (Personal Access Code) and/or PIW (password) may be able to access Direct Services and may use the PAC and/or PIW to transfer money out of an Account, set up bill payment arrangements, make bill payments, and authorize any other Transaction."
Further,
"34. APPLICABLE LAW – This Agreement is governed by the laws of the province of the Depositor’s Account, or if more than 1 Account, then the jurisdiction of incorporation of the Financial Institution and the federal laws of Canada applicable therein, excluding any rules of private international law or the conflict of laws which would lead to the application of any other laws."
9:19 am
July 31, 2013
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Financial institutions and healthcare providers, do not decide what to do with ones property, money and healthcare when a person is not able make decisions on their own.
It is a well, prepared legal power of attorney with a person's instructions, authorization written, dated and signed plus provincial law using that document that decides it.
Beware of those legal will kits, power attorney kits and other legal document kits that state it is not that difficult by just filling them out by yourself.
If no such proper, power of attorney exists. It is the provincial government that decides.
There maybe a delay in dealing with the matter but not being prepared with the necessary, legal documents is asking for more problems and extra future costs then one knows.
Thanks, from SD2013.
9:29 am
October 21, 2013
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Outlook says http://www.outlookfinancial.co.....eement.pdf
"IDENTIFICATION...
I agree as well that my use of any card, personal access code, password or personal identification number issued to or chosen by me in connection with my account is at my sole risk and responsibility. You will not be responsible for any unauthorized use of any card, personal access code, password or personal identification number or any loss that I may suffer because of unauthorized use until I have actually communicated to you that such use is unauthorized. I am fully responsible for maintaining the security of all cards, personal access codes, passwords and personal identification numbers issued to or chosen by me in connection with my account."
"CONFIDENTIALITY AND PERSONAL IDENTIFICATION NUMBER (PIN)...
I understand that my credit union has only disclosed the PIN to me and to no one else, and I will never, under any circumstances, disclose the PIN to any other person. I will not keep a written record of the PIN, unless the written record is not carried next to the debit card and is in a form indecipherable to others."
"LEGISLATION
Nothing in this Account Agreement alters any provision of The Credit Unions and Caisses Populaires Act or any regulation under that Act. The laws of Manitoba apply to this Account Agreement and to any disputes relating to it."
"APPLICATION OF ACCOUNT AGREEMENT
...This Account Agreement is binding on me and on my estate even if I should die, lose mental capacity or become bankrupt."
This is the closest I could find to any statement about POAs.
The problem with this kind of statement, as I see it, and I am not a lawyer, is that while it theoretically permits your POA to act if you give them your access codes, it is not clear to me that they would then be acting in their capacity as POA. Rather, they could just be acting as someone who happens to know your codes for some reason. The difference is that a POA has a legal responsibility to act in your best interests, but someone who just happens to have the codes is in a different situation, the definition of which is not clear to me. If you have said you won't disclose the PIN under any circumstances, that appears to imply that you would not even give it to your POA, and therefore the POA would be seen to perhaps be acting fraudulently and/or not in your best interests.
10:26 am
October 21, 2013
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Accelerate says: http://www.acceleratefinancial.....ipapp.aspx
"Confidentiality and Personal Identification Number (PIN)
The Member(s) will maintain the confidentiality of the Personal Identification Number (PIN)... The Member(s) understands that AcceleRate Financial has only disclosed the PIN to the Member and to no one else, and the Member(s) will never, under any circumstances, disclose the PIN to any other person. The Member(s) will not use their PIN as their telephone or online access code. The Member(s) will not keep a written record of the PIN, unless the written record is not carried next to the Debit Card and is in a form indecipherable to others."
"Jurisdiction
This Membership Account Agreement is governed by and shall be construed in accordance with the laws of Manitoba."
No specific references to POA were found by me.
11:33 am
December 12, 2009
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SD2013 is missing the point of the thread in this case on his point about having power of attorney/will documentation being prepared by an attorney/notary public. While a valid discussion, let's keep it out of this thread (and in a separate thread). Thanks. 
Loonie, you seem to have stumbled upon a glaring omission in the Member/Account Agreement with these so-called "virtual" banking institutions. If you rely on a Power of Attorney instructions, they may not be for you. It's as simple as that.
It's something I never really considered, assuming they'd accept Power of Attorney just as they would an official will (which would likely need to be notarized true copy, adding to one's expense, given they are a "virtual" institution - or it means a trip to Selkirk, Brandon or Winnipeg for your Personal Representative!). However, come to think of it, it makes sense. Dealing non-face-to-face carries enhanced operational and/or legal risks and adding a Power of Attorney into the mix complicates things that much further; it's a step they may not be willing to take and I'm okay with that. So, the level of uncertainty falls to the consumer: how much do you trust your money won't be "trapped" in the event of your mental or physical incapacitation? No amount of "deposit insurance" will protect you from this.
Personally, I'm comfortable with the level of risk. As long as you provide your legal Power of Attorney and/or Personal Representative with updated copies of usernames/passwords/access to e-mail accounts on file, because they are a "virtual" institution who don't read your local paper's obituaries, they likely will never know of your death not to mention your hospitalization until you or your representative tells them. Since you assume all liabilities if you give out your username/password/access to e-mail account, there's really no issue here. I'd just make sure you have at least one (preferrably two or more) linked external bank accounts (even a savings account, without chequing privileges, if you're worried about monthly fees) with a "bricks & mortar" institution and make sure you deposit, say, $5 once per year (since EFT transfers in/out can be blocked if that account goes dormant after more than 12 months of inactivity) that your representative can transfer all of your funds out should the need arise. They can then deal with that "bricks & mortar" institution at that time in terms of opening a chequing account if they need time to deal with your affairs and/or Estate.
Hope that helps and alleviates some concerns!
Cheers,
Doug
12:50 pm
October 21, 2013
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I appreciate your thoughts, DOUG.
I can see where these institutions might not want to dirty their hands dealing with POAs. However, to leave families in such an impossible situation seems to me to be quite counter to the idea that they are member-owned and member-friendly institutions. I think they have an obligation to provide a reasonable solution to such eventualities. They accept non-face-to-face members with even less documentation than a notarized power of attorney, it seems to me. It may be a weakness in the legal system, actually, inasmuch as there is, to be best of my knowledge, no way of "proving" that you are the attorney of record, whereas a will has to be "proved" or accepted by a court. If the institution wanted to be member-friendly, they would simply allow the member to fill out a form nominating their attorney, which would be recorded at the institution for future reference as needed, so there would be no confusion as to who held it. They could have lots of wording absolving them from further responsibility, and obliging the member to notify the institution of any change in this regard.
I remain wary of the advisability of having the attorney just carry on in one's stead without announcing anything, although I'm sure it's quite possible to do this. What are the legal implications of agreeing that you will not divulge your password etc "under any circumstances", and then going ahead and doing so anyway? Would that invalidate their promise that they would be liable for someone else somehow gaining access to your account? I don't know. Also, an attorney may feel uncomfortable and not want to do it this way.
Also, not all of these institutions offer customer-initiated electronic transfers-out. Maxa, for instance, does not. Has to be done by cheque, phone or cash at ATM. Cheque obviously won't work as signature would be wrong; phone would be wrong voice (and at some future point they may well have voice recognition system etc.); ATM only gives you cash, which would have a ceiling on withdrawals and could be difficult to redeposit elsewhere. It's not easy to withdraw 10s of thousands of dollars by ATM anyway! I'm sure red flags would go up on the account.
Even bigger problem with registered accounts, as funds need to be moved in accordance with CRA rules, ALTHOUGH I think I can see a possible way around that latter problem: If the POA goes to a bricks-and-mortar bank, gets themselves recognized as POA, they could then request a transfer-in from the uncooperative CU, BUT that would still mean that the CU had to recognize the validity of the request thus initiated. Perhaps the bricks-and-mortar bank would take up the cause, as they would want to get the money in their bank.
I think everyone will need to assess this situation carefully and see if it meets their needs, especially seniors.
As you suggest, Doug, it's a much higher risk of something going wrong than the likelihood of institutional failure.
Any estate lawyers out there who would care to comment??
1:07 pm
October 21, 2013
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By the way, ING/Tangerine automatically makes a debit from your bricks-and-mortar bank annually, which keeps the account alive.
1:57 pm
October 21, 2013
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I just received a response from the manager of deposit services at MAXA which is helpful (after 2 other answers from other employees which did not really address the question):
"MAXA Financial currently does not add Power of Attorney’s to our memberships because it is harder to administer the relationship with the members. Since we do not meet you in person or are we aware of any health situations you may run into we are not sure when a POA will be needed to act on your behalf. It is also complicated as we also do not meet the POA that will have full access to all your funds held at our institution. We most certainly will accept instructions from a POA to transfer funds to another financial institution where they have been added to your account to administer your funds. It is then the responsibility of the other financial institution to verify this POA has the correct authorization to sign on your behalf and we accept these instructions from the other financial institution."
(my emphasis)
I still think they are excessively nervous about attorneys. In Ontario, at least, the standard lawyer's document does not restrict the use of the attorney to disability, but takes effect immediately unless a clause has been added. Also, they don't meet either the member OR the POA, so why discriminate? I think they could get around a lot of these issues by providing a form for people to fill out.
However, I am relieved to know that it will be possible for my attorney to move the money elsewhere, albeit with a likely loss of interest income. This latter will be a consideration in retirement planning that I had not previously considered, i.e. that when one of us becomes incapacitated, our joint income from GiCs would go down by about 1/4 to 1/3, at current rates because we would have to move it to BigBank. I guess BBs do provide some additional benefits
, but we take a big hit for it, and it could occur at a time when one partner is seriously disabled and the couple needs more income, not less.
I've never seen that mentioned in a retirement planning book, and I'd love to meet the CFP who has ever discussed it knowledgeably with their clients! - if such exists, I might just sign up for their services.
2:15 pm
February 22, 2013
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An account that is set up as JTWROS is fine provided both parties aren't in the same accident.
GS
2:27 pm
October 21, 2013
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GS said
An account that is set up as JTWROS is fine provided both parties aren't in the same accident.
GS
Right. However, this only works for non-registered accounts. Registered accounts cannot be held jointly (TFSA, RRSP, RIF).
Further, there are reasons for and against joint accounts versus POA. Joint account is most convenient; either party can act in their own interests in managing the account, and there is a smooth transition upon death of one. However, POA is required by law to act in the best interests of the person they are representing and does not necessarily inherit. This would probably be more problematic for single persons.
Circumstances vary, obviously.
2:32 pm
February 22, 2013
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My parents and my Aunt and Uncle all set up Powers of Attorney for Property (in Ontario) naming me as attorney, using two different lawyers.
The wording includes this phrase:
"...this continuing power of attorney may be exercised duirng any incapacity on my part to manage my property, pursuant to section 7 of the Substitute Decisions Act."
Many of the institutions (life insurance, health insurance, pension boards, CRA, Service Canada) I deal with using this POA accept a FAXed copy of it. There are no rstrictions on what I can do.
Banks and credit card companies want proof that the grantor of the POA does, in fact, have an incapacity to manage their property. This amounts, for most, to a judge certifying a doctor's opinion.
My father wanted to stop receiving statements from a credit card company. I called to have it changed. Their response was, "have your father call". I asked what would happen if he were in a coma. Their response, "is he?" We went in circles for a while.
The next week, I called and gave the account number and mumbled my name and said i wanted to change my address. All done in 60 seconds.
GS
2:47 pm
October 21, 2013
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GS said
My parents and my Aunt and Uncle all set up Powers of Attorney for Property (in Ontario) naming me as attorney, using two different lawyers.
The wording includes this phrase:
"...this continuing power of attorney may be exercised duirng any incapacity on my part to manage my property, pursuant to section 7 of the Substitute Decisions Act."
Many of the institutions (life insurance, health insurance, pension boards, CRA, Service Canada) I deal with using this POA accept a FAXed copy of it. There are no rstrictions on what I can do.
Banks and credit card companies want proof that the grantor of the POA does, in fact, have an incapacity to manage their property. This amounts, for most, to a judge certifying a doctor's opinion.
GS
Your relatives likely opted to have this phrase included, as it does not appear on the ones in my possession which are active at the moment. I was actually present when one of them was being arranged, and the lawyer did not even ask if this clause was wanted. (I think she should have, but she did not.)
I'm impressed that you are, in Ontario, able to get a doctor to sign anything. I have, in relation to one relative, recently dealt with a geriatrician (who diagnosed dementia, but "not my job" to declare incompetency), a psychiatrist (who used, in the nurse's words, "cryptic language" to describe the patient's capacity), and finally a CCAC coordinator. Only the latter, who is not a physician, was willing to declare the person at least incompetent to decide where he should live, and she has the power of enforcement as long as he does not appeal to the Tribunal that oversees this, which, of course, he's not capable of doing.
6:31 pm
March 7, 2013
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A cautionary tale re: vulnerable seniors and joint accounts: In the last year and a half of my mother's life, my brother, who lived at her house and did not work, persuaded her to change her will, giving him her house, contents and two cars. In the last 6 months he persuaded her to make all her accounts joint accounts with him. When the other sibs expressed concern to her, she indicated that this was only to help her pay her bills if she couldn't get out, not to give him access to her money. In the last 3 months, he persuaded her to cash in all her GICs and all those funds got transferred out of her bank account to his it was later found.
In her final two months in the hospital, unbeknown to anyone, he was going almost daily to the bank and taking out maximum cash withdrawals. This continued after her death until we were able to see the lawyer and get those accounts sealed. And of course there was the delay I mentioned earlier with the bank refusing to release the original will from the safety deposit box, without which we couldn't proceed.
When all was said and done, three hard-working siblings ended up with a couple of thousand dollars each, funeral, accounting and legal expenses; and one sibling ended up with a very fat bank account, clear title house, and two cars, and no need to ever work!
Hopefully, something like this would never happen to any other family, but it does bear keeping in mind when making joint accounts that there can be unscrupulous relatives who would take advantage of vulnerable seniors.
Please write your comments in the forum.