TreasuryDirect refusing Power of Attorney

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TreasuryDirect refusing Power of Attorney

Postby archbish99 » Tue Jul 03, 2012 2:36 pm

TreasuryDirect, long the bane of many of us, has thrown an interesting twist. They refuse to accept my parents' general power of attorney documents. Their state law requires a PoA to be notarized and recorded with the county recorder of deeds, which has been done. TreasuryDirect says they require a medallion signature guarantee on a PoA.

I'm not sure what the legalities are here -- can a financial institution, even if they are a branch of the US Treasury, legally decline to accept a power of attorney which is validly executed under state law? (And specifically enumerates the authority to "perform any act necessary to deposit, negotiate, sell or transfer any note, security, or draft of the United States of America, including U.S. Treasury Securities"!)

(Of course, the practicalities are that it would probably be easier to get the medallion guarantee than force TreasuryDirect to acknowledge the notarized version, even if they were legally in the wrong. This is a theoretical question about the situation.)
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Re: TreasuryDirect refusing Power of Attorney

Postby john94549 » Tue Jul 03, 2012 4:21 pm

This reminds me of the incredible hassles I had when my Mom (now age 97) was just back from the nursing home a couple of years ago. She authorized me (in writing, before witnesses, notarized, the whole she-bang) to cash-out her various short-term CDs and plop them in a much better long-term CD with USAA. Her banks basically ignored her directive, except for one, and required that I get her to sign the documents. The "durable power of attorney" was basically useless. According to the banks, you have to get a court order. It was very unsettling.
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Re: TreasuryDirect refusing Power of Attorney

Postby The Wizard » Tue Jul 03, 2012 4:27 pm

We need better lawyers, darn it all...
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Re: TreasuryDirect refusing Power of Attorney

Postby archbish99 » Tue Jul 03, 2012 5:54 pm

Interesting.... After a look at the Uniform Power of Attorney Act, adopted by all 50 states and the District of Columbia:
  • Section 107 provides that a POA from any state is valid in any other state, and is to be construed under the laws of the state in which it was executed.
  • Section 120(a)(3) says that an additional/different PoA may not be requested if the original PoA grants the authority in question
  • Section 120(b) provides that a POA may only be refused if:
    • ...they could refuse to do business with the principal as well
    • ...doing business with the principal in the same circumstances would violate federal law
    • ...they know the power of attorney has been terminated
    • ...the agent refuses to provide a certification or an English translation of the POA when requested
    • ...they have a good-faith belief that the POA is invalid
    • ...they have a good-faith belief that the POA is being abused and make a report to local authorities of potential elder abuse
  • Section 120(c) provides that anyone who refuses to accept a power of attorney is liable for the agent's legal fees involved in compelling them to accept it.
Last edited by archbish99 on Tue Jul 03, 2012 6:40 pm, edited 1 time in total.
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Re: TreasuryDirect refusing Power of Attorney

Postby sscritic » Tue Jul 03, 2012 6:02 pm

When did the federal government become a state? Under what circumstances can a state sue the Federal government? Is a suit to compel the Federal government to accept a power of attorney one of them? My guess is that a state cannot compel the Federal government in this way. In other words, who cares what state law is? It's irrelevant (my guess).
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Re: TreasuryDirect refusing Power of Attorney

Postby tetractys » Tue Jul 03, 2012 6:24 pm

This is the first thing to come to my mind as well: the Fed is not a state. -- Tet
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Re: TreasuryDirect refusing Power of Attorney

Postby nonnie » Tue Jul 03, 2012 6:36 pm

[quote="archbish99"]

My experience with TreasuryDirect is that they can do anything they want to do. After months and months of increasing demands/requirements--each time I satisfied one, they wanted something else--we abandoned $750 of inherited EE bonds. We even had one agent suggest we use the wrong form "because it's easier, under the limit and they'll just cash them for you, using ForM XXX [the correct form] will result in endless delays and a high likelihood you'll never be able to redeem them."

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Re: TreasuryDirect refusing Power of Attorney

Postby archbish99 » Tue Jul 03, 2012 6:38 pm

An interesting point. In that case, how can a PoA ever be valid for filing taxes? If there's no federal statute recognizing state PoAs and no state authority to make them valid for federal interaction....

Or is the argument that, absent a federal law, a federal entity's internal policies can trump state law regardless of where they're located?
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Re: TreasuryDirect refusing Power of Attorney

Postby sscritic » Tue Jul 03, 2012 6:43 pm

archbish99 wrote:An interesting point. In that case, how can a PoA ever be valid for filing taxes?

I don't believe the states can compel the federal government to recognize them, but that doesn't mean that some agencies cannot choose to recognize them. The IRS section of the Treasury Department may choose to recognize them, while the TreasuryDirect section of the Treasury Department chooses not to.

[This is not a legal opinion, just something off the top of my head; that's where all my legal thinking is done.]
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Re: TreasuryDirect refusing Power of Attorney

Postby archbish99 » Tue Jul 03, 2012 6:55 pm

sscritic wrote:
archbish99 wrote:An interesting point. In that case, how can a PoA ever be valid for filing taxes?

I don't believe the states can compel the federal government to recognize them, but that doesn't mean that some agencies cannot choose to recognize them. The IRS section of the Treasury Department may choose to recognize them, while the TreasuryDirect section of the Treasury Department chooses not to.

I think this is actually the correct interpretation -- the IRS uses Form 2848 to authorize a representative. Somewhat bizarrely, they will also accept non-IRS powers of attorney -- but require the PoA to be accompanied by a Form 2848. :)

Edit: Ah, I see. If the original PoA grants authority to deal with tax matters, the IRS will accept a Form 2848 signed by the agent designating themselves as agent.
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Re: TreasuryDirect refusing Power of Attorney

Postby sscritic » Tue Jul 03, 2012 8:10 pm

archbish99 wrote:Edit: Ah, I see. If the original PoA grants authority to deal with tax matters, the IRS will accept a Form 2848 signed by the agent designating themselves as agent.

Don't you love this stuff. When I bought my house I had to submit a statement to confirm that I was the trustee of my trust. My name on the trust and on the signature page as trustee wasn't good enough, so they needed a separate form signed by the trustee. But since the amount of the loan was under $500k, the trustee didn't need any certification. In other words, I certified myself. :)

The undersigned,
[Trustee(s)]
for the
settlor(s) certify(ies) to you that:
1. The above Trust instrument has not been revoked and is in full force and effect.
2. The name(s) of the Trustee(s) now qualified to act under the Trust instrument and who are the only Trustee(s) qualified to act is/are:


IN THE EVENT THAT THIS CERTIFICATION IS BEING USED IN A TRANSACTION IN AN AMOUNT OF $500,000 OR LESS, THE ATTACHMENTS CALLED FOR IN ITEMS 3 AND 5 ABOVE ARE NOT REQUIRED. IF THE TRANSACTION EXCEEDS $500,000, THEN THIS CERTIFICATION MUST BE NOTARIZED.
http://www.chicagotitleconnection.com/I ... cation.pdf

I gave my name as the trustee and then certified that I was the trustee in 2, followed by my signature at the bottom to attest to my trusteeship. Clearly, they were willing to trust me. :)
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Re: TreasuryDirect refusing Power of Attorney

Postby archbish99 » Tue Jul 03, 2012 8:31 pm

That actually makes sense -- I've had to provide a certification (allowed under UPOAA) at least once. I attested, under penalty of perjury and witnessed by a notary, that I was the same person named in the POA, that to the best of my knowledge the principal was not deceased and the POA had not been terminated, and that I would immediately cease operating under the POA if any of that changed. They were asking you to make the same promises about your trust, so if the grantor sued them for complying they had an appropriate paper trail to say "No, sue him instead!"
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Re: TreasuryDirect refusing Power of Attorney

Postby sscritic » Tue Jul 03, 2012 8:37 pm

archbish99 wrote:That actually makes sense -- I've had to provide a certification (allowed under UPOAA) at least once. I attested, under penalty of perjury and witnessed by a notary, that I was the same person named in the POA, that to the best of my knowledge the principal was not deceased and the POA had not been terminated, and that I would immediately cease operating under the POA if any of that changed. They were asking you to make the same promises about your trust, so if the grantor sued them for complying they had an appropriate paper trail to say "No, sue him instead!"

But at least you needed a notary; I just signed and sent it back after filling in my own name in three places and then signing as myself. Of course, I am the grantor, so that would make a great lawsuit.
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Re: TreasuryDirect refusing Power of Attorney

Postby wjo » Wed Jul 04, 2012 2:04 am

In my experience, most financial institutions will refuse a POA unless compelled to do so. They strongly prefer their own forms designating a POA. They seem to have judged that the risk of accepting a POA incorrectly is greater than the cost of not accepting them. When my mom was sick and rapidly losing capacity, this became a real problem. Last year, my wife and I were buying a house and were out of town during the closing. We had left a POA on file with the bank and one week before closing the bank decided it was no longer going to accept the POA. We had to go to a US consulate to notarize the documents. Basically, the cost of compelling the bank to accept the POA is so high that banks have judged that most people won't bother.
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Re: TreasuryDirect refusing Power of Attorney

Postby kaneohe » Wed Jul 04, 2012 4:10 am

wjo wrote:In my experience, most financial institutions will refuse a POA unless compelled to do so. They strongly prefer their own forms designating a POA. They seem to have judged that the risk of accepting a POA incorrectly is greater than the cost of not accepting them. When my mom was sick and rapidly losing capacity, this became a real problem. Last year, my wife and I were buying a house and were out of town during the closing. We had left a POA on file with the bank and one week before closing the bank decided it was no longer going to accept the POA. We had to go to a US consulate to notarize the documents. Basically, the cost of compelling the bank to accept the POA is so high that banks have judged that most people won't bother.


This is my experience also so probably has nothing to do w/ TD itself. In order to get one CU to accept wife's POA, she
had to fill out their form certifying that the POA was valid and that I was authorized to act for her. This worked since it was only for convenience but basically POA was useless by itself if wife had been incapacitated.
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Re: TreasuryDirect refusing Power of Attorney

Postby sscritic » Wed Jul 04, 2012 8:14 am

I wonder how much POA fraud there is. POA abuse might be one way to take advantage of the elderly. The financial institutions may just be making sure that the 85 year old person who signed the power of attorney two years ago still wants to buy a new BMW for his caretaker. I think a POA is used in many of the cases of financial abuse of the elderly that I have read about in the news.
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Re: TreasuryDirect refusing Power of Attorney

Postby whomever » Wed Jul 04, 2012 10:35 am

My experience with TreasuryDirect is that they can do anything they want to do. After months and months of increasing demands/requirements--each time I satisfied one, they wanted something else--we abandoned $750 of inherited EE bonds.

It might be worth writing a short summary and sending it to your senator or representative. They won't even see the letter, but they have staffers who will write a 'can you check on this' letter to the involved agency. I know a few people who have done so with good results.
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Re: TreasuryDirect refusing Power of Attorney

Postby sscritic » Wed Jul 04, 2012 10:41 am

whomever wrote:It might be worth writing a short summary and sending it to your senator or representative. They won't even see the letter, but they have staffers who will write a 'can you check on this' letter to the involved agency. I know a few people who have done so with good results.

You don't have to write a letter. Your congressman has a district office. The office has staff. You can talk to the staff. The staff may even write a letter for you to TD. TD will respond to the Congressman. TD might even call you directly. That's what I did when I had a problem with SS. I had waited almost a year for a response from SS, but got a phone call within three days of visiting my Congresswoman's office.

Nonnie: did you try your Congressman's office?
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Re: TreasuryDirect refusing Power of Attorney

Postby nonnie » Wed Jul 04, 2012 7:58 pm

sscritic wrote:.

Nonnie: did you try your Congressman's office?


Oh sure I did especially after all the great help I received with my Social Security repayment, :annoyed. TD made it a really complex situation. Parents had died 10 years prior, leaving a trust with only themselves as trustees so it was a headless trust. When moving an inherited picture, bonds fell out of back. Bonds were in father's name (who died last) with mother as alternate benificiary.

First TD wanted certified copy of will which we ordered and sent. Then they wanted certified copy of trust which state could not provide and lawyer's office wanted $150 or so to "look" for. We sent plain copy of trust to TD and they then wanted certified copy of distribution of assets when will was probated (assets were split evenly between two sons), affadavit from state or lawyer certifiying it was headless trust and wanted other son to sign off on everything. Not only did he refuse to do that before all documentation had been completed, he refused to participate in costs or efforts. When TD said they would not UNDER ANY CIRCUMSTANCES redeem only half the bonds and insisted they needed both heirs to sign--and provided documentation of either law or rules to that effect-- I gave up. I spent many hours and many letters and phone calls for only $375 ($750 total bonds that wasn't even mine and finally understood why at the beginning why a TD employee had recommended filing a form saying there hadn't been a will. It's been a couple years, I think I have the details right. Where's the steam coming out of your ears smilie when you need it?

At the time I even corresponded with a fellow BH who had the same problem with TD when her sister wouldn't sign TD forms, much larger dollar amount, sister finally relented and signed and their bonds were cashed by TD.

Thanks for asking :happy

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