Unable to Access POA in Revocable Trust

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TBillT
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Unable to Access POA in Revocable Trust

Post by TBillT » Sat Jun 17, 2017 9:53 am

Was this a mistake by the lawyer? He said we could not access the POA/trust document without a death certificate.

We just lost a loved one after a brief (1-week) illness in the hospital, during which time our loved one was permanently incapacitated. So we were attempting to activate the POA provision in the Revocable Trust to pay the medical bills. The appointed successor Trustee was a Bank. However, the lawyer said nobody (neither bank/Trustee nor ourselves) was entitled to a copy of the Trust until there was death certificate. So we had to pay medical bills out of our own pocket, assuming later reimbursement by the estate. Now we finally have the Trust document and there is indeed a POA provision in there, but it was useless for helping us with the immediate problem in the hospital. Even if we had had a copy of the trust, the bank is moving slowly to accept their Trustee role, so I suspect this POA would only have helped for a very extended period.

One complexity was this happened overseas, so the hospital wanted immediate payment of medical bills, and did not want to bill the insurance company directly.

Goodman60
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Re: Unable to Access POA in Revocable Trust

Post by Goodman60 » Sat Jun 17, 2017 10:05 am

Why the hurry to pay the hospital? And why is this not the successor Trustee's problem?

littlebird
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Re: Unable to Access POA in Revocable Trust

Post by littlebird » Sat Jun 17, 2017 10:06 am

Powers of Attorney expire on death. An individual Trustee, either a Successor Trustee, or a Co-Trustee, could have sprung into action immediately, but you can't expect a bank to do so very quickly when the trusteeship is new to them. It will all work itself out.

TBillT
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Re: Unable to Access POA in Revocable Trust

Post by TBillT » Sat Jun 17, 2017 10:45 am

Goodman60 wrote:Why the hurry to pay the hospital? And why is this not the successor Trustee's problem?
The Hospital (overseas) demanded payment. Presumably the Hospital might not have released the deceased remains but we did not take it that far, we just paid via credit card assuming the estate would reimburse expenses. We took the approach of getting back home expeditiously.

Realizing our loved one's lawyer was mandating an American death certificate prior to taking any actions, we went to the overeseas US Embassy and the Embassy was extremely helpful in expediting the English-translation of the overseas death certificate in about 1-week after the death, normally this step could take several months and we'd still be waiting for the attorney to do anything. So in some ways we are ahead in the "game" but still we are not getting reimbursed for the expenses as the Bank has been very slow in accepting their role as Trustee.

The Bank is methodical and needs supplemental supporting documentation and steps before they can make their business decision to accept the Trustee role. It is a fairly complex estate.

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dm200
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Re: Unable to Access POA in Revocable Trust

Post by dm200 » Sat Jun 17, 2017 10:59 am

littlebird wrote:Powers of Attorney expire on death. An individual Trustee, either a Successor Trustee, or a Co-Trustee, could have sprung into action immediately, but you can't expect a bank to do so very quickly when the trusteeship is new to them. It will all work itself out.
This is a common misunderstanding about a POA. They expire upon the death of the Grantor.

dbr
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Re: Unable to Access POA in Revocable Trust

Post by dbr » Sat Jun 17, 2017 11:01 am

I thought by saying "we were trying . . ." that the problem was not being able to use the POA during the week preceeding death. That may not be the case or matter, however. If it were the case, that sounds odd they could not activate the POA.

TBillT
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Re: Unable to Access POA in Revocable Trust

Post by TBillT » Sat Jun 17, 2017 3:08 pm

dbr wrote:I thought by saying "we were trying . . ." that the problem was not being able to use the POA during the week preceding death. That may not be the case or matter, however. If it were the case, that sounds odd they could not activate the POA.
Yes that was the problem we could not use the POA prior to the death. The lawyer did give us the Medical POA and the financial POA language during the illness. We called before the death and asked the lawyer and the Bank how we could activate it to pay the bills? The Bank (trustee) said they had no info on file, and the lawyer said he needed a death certificate before he could give the Bank the info.

So it was a Catch 22 ...we had a POA but no way to get use out of it without a death certificate. At the time of course, we did not know how long the illness/situation would last.

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FIREchief
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Re: Unable to Access POA in Revocable Trust

Post by FIREchief » Sat Jun 17, 2017 5:30 pm

I'm confused by a few things here. Isn't a durable power of attorney normally a separate document from a revocable trust? If so, shouldn't the grantor have provided it (or at least made it easily accessible) to the person named as POA? While the grantor was still alive, the POA should have been able to access the grantor's financial accounts acting on behalf of the incapacitated individual. On the other hand, if the living trust made provisions for a successor trustee during incapacitation, then the POA should not have entered the equation. The successor trustee (likely upon providing proof of incapacitation) could gain access to trust accounts as current trustee (not as POA). I thought that is why financial institutions normally require either a copy of a trust, or the trust certification, when establishing trust ownership.

Regardless, I think in many/most situations, there is a need for individuals to ensure that estate planning documents are accessible to those who need access at either incapacitation or death.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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TimeRunner
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Re: Unable to Access POA in Revocable Trust

Post by TimeRunner » Sat Jun 17, 2017 5:40 pm

FIREchief wrote:Regardless, I think in many/most situations, there is a need for individuals to ensure that estate planning documents are accessible to those who need access at either incapacitation or death.
This, or from the other direction (as applies to my situation), individuals who need access to estate planning documents upon the incapacitation or death of a surviving parent, etc, need to ensure that they have asked for and received those documents ahead of time. I'm in the process of doing that now, and some of these docs have not been looked at by anyone since 1989. Just happy I can work on this before surviving parent dies and sibling presses for inheritance.
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dbr
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Re: Unable to Access POA in Revocable Trust

Post by dbr » Sat Jun 17, 2017 6:50 pm

Was this a so-called "springing POA" which if I understand correctly is only activated when the grantor becomes incapacitated? Anyway, the POA should be active and on-file where it might be needed long before the grantor becomes incapacitated. That means a POA allows someone to do things alongside a perfectly competent grantor. Those things might even be things the grantor does not agree to. In that case the grantor would have to go back and countermand the orders and conceivably even withdraw the POA.

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Re: Unable to Access POA in Revocable Trust

Post by NotWhoYouThink » Sat Jun 17, 2017 7:03 pm

Your relative probably thought he had planned for everything, but evidently this set of events was not foreseen. I'm sorry the family is having to deal with this.

I'm not clear on whether the POA language in the trust would have done for you, but it doesn't matter now. If your relative did not see fit to give anyone a copy of the trust while he was in good health, that was his choice and there is nothing to be done about it.

As for now, what does the trust say? Does it direct the successor trustee to pay debts and bills from your relative's final illness and funeral? If so, you'll get paid back eventually.

If the bank refuses the role, does the trust name an alternate successor? If not, then a court might have to get involved.

TBillT
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Re: Unable to Access POA in Revocable Trust

Post by TBillT » Sat Jun 17, 2017 7:13 pm

FIREchief wrote:I'm confused by a few things here. Isn't a durable power of attorney normally a separate document from a revocable trust? If so, shouldn't the grantor have provided it (or at least made it easily accessible) to the person named as POA? While the grantor was still alive, the POA should have been able to access the grantor's financial accounts acting on behalf of the incapacitated individual. On the other hand, if the living trust made provisions for a successor trustee during incapacitation, then the POA should not have entered the equation. The successor trustee (likely upon providing proof of incapacitation) could gain access to trust accounts as current trustee (not as POA). I thought that is why financial institutions normally require either a copy of a trust, or the trust certification, when establishing trust ownership.

Regardless, I think in many/most situations, there is a need for individuals to ensure that estate planning documents are accessible to those who need access at either incapacitation or death.
We were confused too. Keep in mind the appointed POA was a Bank, so @littlebird above was probably correct when he suggested we could not have expected the Bank to spring into immediate action. The Bank would have needed the trust document, to act. The lawyer basically had a rule that a death certificate was needed before the Trust document would be given to the Bank and to us. The same Bank is also the Trustee.

So I am thinking maybe the lawyer made a mistake. His rule (re: not distributing the trust until death) were possibly wrong. Shouldn't he have realized that he himself as lawyer put provisions in the trust for the Bank to be the POA and therefore the bank(POA) should be allowed to get a copy of the Trust upon incapacitation of the client? It was basically the lawyer who stopped the process by saying a death certificate was needed before anyone got trust documents. Even if the lawyer had advised us properly, it sounds like the Bank may not have sprung into action, but at least the lawyer could have said that, and allowed the Trust documents to flow to the Bank as POA/Trustee.

As far as access to documents, we had good access to the attorney who prepared the document. He also gave us medical POA statement an financial POA statement (Bank as POA). We nor the Bank were not allowed a copy of the trust until death, so we did not understand the how the POA statement related to the trust ( the Trust itself has the language about medical opinion needed for incapacitation, which we probably could have secured fairly promptly).

TBillT
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Re: Unable to Access POA in Revocable Trust

Post by TBillT » Sat Jun 17, 2017 7:22 pm

dbr wrote:Was this a so-called "springing POA" which if I understand correctly is only activated when the grantor becomes incapacitated? Anyway, the POA should be active and on-file where it might be needed long before the grantor becomes incapacitated. That means a POA allows someone to do things alongside a perfectly competent grantor. Those things might even be things the grantor does not agree to. In that case the grantor would have to go back and countermand the orders and conceivably even withdraw the POA.
Maybe, we can eventually ask the Bank rep why they were not able to act more promptly as POA. Perhaps they were not pre-supplied the trust/financial documents they would have needed to act as POA. From our perspective, it seemed clear there was a POA named, and the Bank was it. But when we called the Bank estate department, that all seemed to be news for them.

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Re: Unable to Access POA in Revocable Trust

Post by TBillT » Sat Jun 17, 2017 7:32 pm

NotWhoYouThink wrote:Your relative probably thought he had planned for everything, but evidently this set of events was not foreseen. I'm sorry the family is having to deal with this.

I'm not clear on whether the POA language in the trust would have done for you, but it doesn't matter now. If your relative did not see fit to give anyone a copy of the trust while he was in good health, that was his choice and there is nothing to be done about it.

As for now, what does the trust say? Does it direct the successor trustee to pay debts and bills from your relative's final illness and funeral? If so, you'll get paid back eventually.

If the bank refuses the role, does the trust name an alternate successor? If not, then a court might have to get involved.
Thank you. It is partially that this sudden illness happened outside of the USA on vacation that caused the problem of a hospital not accepting usual insurance. So we really needed a way to pay the big bills in an emergency. Yes we are hoping to get reimbursed from the estate. But as you are correctly grasping, there is still some uncertainty about that.

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Re: Unable to Access POA in Revocable Trust

Post by Gill » Sat Jun 17, 2017 7:47 pm

You need to be sure you file a timely claim against the estate for these debts of the decedent you paid. I don't see where you should have a problem unless the estate is insolvent.
Gill

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Re: Unable to Access POA in Revocable Trust

Post by TBillT » Sun Jun 18, 2017 1:26 pm

Gill wrote:You need to be sure you file a timely claim against the estate for these debts of the decedent you paid. I don't see where you should have a problem unless the estate is insolvent.
Gill
Gill I agree, but the spirit of this post is to just try to understand why we had a POA but were not able to use it in the emergency. We will plan to followup with the Bank representative to ask about it why it was that we could not use that provision.

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Re: Unable to Access POA in Revocable Trust

Post by bsteiner » Sun Jun 18, 2017 1:42 pm

A power of attorney and a revocable trust are different documents.

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Re: Unable to Access POA in Revocable Trust

Post by dbr » Sun Jun 18, 2017 3:09 pm

bsteiner wrote:A power of attorney and a revocable trust are different documents.
Yes, no one can figure out why issues about the trust have something to do with not being able to apply a POA.

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Re: Unable to Access POA in Revocable Trust

Post by Steelersfan » Sun Jun 18, 2017 5:26 pm

If the bank had no knowledge it had been named POA it's understandable they would proceed with caution and not start paying bills immediately under the direction of someone they didn't know.

Did the deceased have a relationship with the bank estate department? Did the bank estate department even know the names of the people who showed up with the bills? If they didn't have the trust document, probably not.

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Re: Unable to Access POA in Revocable Trust

Post by TBillT » Mon Jun 19, 2017 10:30 am

Steelersfan wrote:If the bank had no knowledge it had been named POA it's understandable they would proceed with caution and not start paying bills immediately under the direction of someone they didn't know.

Did the deceased have a relationship with the bank estate department? Did the bank estate department even know the names of the people who showed up with the bills? If they didn't have the trust document, probably not.
We do not know some of those answers, but we will try to find out as we go along.
Part of the difficulty here we are brother-sister related so we do not have immediate-household knowledge of such info.

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Re: Unable to Access POA in Revocable Trust

Post by ncbill » Mon Jun 19, 2017 12:04 pm

This is the part that confuses me.

Why did you need anything more than the consular "Report of Death of a U.S. Citizen Abroad" for the lawyer or anyone else involved in settling the estate?
TBillT wrote: Realizing our loved one's lawyer was mandating an American death certificate prior to taking any actions, we went to the overeseas US Embassy and the Embassy was extremely helpful in expediting the English-translation of the overseas death certificate in about 1-week after the death, normally this step could take several months and we'd still be waiting for the attorney to do anything.

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Re: Unable to Access POA in Revocable Trust

Post by TBillT » Mon Jun 19, 2017 12:28 pm

ncbill wrote:This is the part that confuses me.

Why did you need anything more than the consular "Report of Death of a U.S. Citizen Abroad" for the lawyer or anyone else involved in settling the estate?
TBillT wrote: Realizing our loved one's lawyer was mandating an American death certificate prior to taking any actions, we went to the overeseas US Embassy and the Embassy was extremely helpful in expediting the English-translation of the overseas death certificate in about 1-week after the death, normally this step could take several months and we'd still be waiting for the attorney to do anything.
We did get that document fast (1-week= very fast) because that is what the lawyer said was needed to get the Bank/Trustee involved. But that document comes after the death. What we were trying to do is pay medical bills via Bank/Trustee POA prior to death, because the overseas hospital was hitting us up for payment agreement from the time we stepped into the door with the patient. Basically the hospital wanted a credit card from us because they did not have an direct-pay agreement with the USA insurance policy. And we're talking $$$$$.

We did have from the lawyer a POA document separate from the trust, with Bank as Trustee. So we said "aha! this must be the payment solution we are looking for". But when we called the Bank, they were not yet ready to act as POA without a lot more information. I am thinking the lawyer should have told us the POA was not ready to be used, when he gave it to us.

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Re: Unable to Access POA in Revocable Trust

Post by bsteiner » Mon Jun 19, 2017 2:23 pm

TBillT wrote:... We did have from the lawyer a POA document separate from the trust, with Bank as Trustee. So we said "aha! this must be the payment solution we are looking for". But when we called the Bank, they were not yet ready to act as POA without a lot more information. I am thinking the lawyer should have told us the POA was not ready to be used, when he gave it to us.
Banks generally don't want to act as agents under a power of attorney. If someone doesn't have a suitable individual available, and wants a bank to act in that capacity, the workaround is to create a revocable trust, with the bank as a trustee.

If the original poster or some other family member would have been a suitable choice as agent, there may not have been any need for the revocable trust. If not, then in order for it to work, the bank would have to have been a trustee or co-trustee from the inception, not merely a successor trustee.

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Re: Unable to Access POA in Revocable Trust

Post by dbr » Mon Jun 19, 2017 3:21 pm

bsteiner wrote:
TBillT wrote:... We did have from the lawyer a POA document separate from the trust, with Bank as Trustee. So we said "aha! this must be the payment solution we are looking for". But when we called the Bank, they were not yet ready to act as POA without a lot more information. I am thinking the lawyer should have told us the POA was not ready to be used, when he gave it to us.
Banks generally don't want to act as agents under a power of attorney. If someone doesn't have a suitable individual available, and wants a bank to act in that capacity, the workaround is to create a revocable trust, with the bank as a trustee.

If the original poster or some other family member would have been a suitable choice as agent, there may not have been any need for the revocable trust. If not, then in order for it to work, the bank would have to have been a trustee or co-trustee from the inception, not merely a successor trustee.
It sounds like expecting a bank to manage someone's personal affairs, for example being able to access money to pay for medical care overseas, is not realistic. I wonder if the lawyer gave bad advice or the grantor was reluctant to go so far as to give this power to a family member or friend. There are also hazards involved in passing out POA and obligations people might not want.

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Re: Unable to Access POA in Revocable Trust

Post by ncbill » Mon Jun 19, 2017 3:26 pm

So you didn't understand that any POA was void upon death, and then the bank dragged its feet about paying the medical bills, even though the bank (only the bank?) was named as successor trustee?

Yet another reason never to name a bank or other institution as successor trustee... :)
TBillT wrote:
ncbill wrote:This is the part that confuses me.

Why did you need anything more than the consular "Report of Death of a U.S. Citizen Abroad" for the lawyer or anyone else involved in settling the estate?
TBillT wrote: We did have from the lawyer a POA document separate from the trust, with Bank as Trustee. So we said "aha! this must be the payment solution we are looking for". But when we called the Bank, they were not yet ready to act as POA without a lot more information. I am thinking the lawyer should have told us the POA was not ready to be used, when he gave it to us.

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Re: Unable to Access POA in Revocable Trust

Post by susa » Tue Jun 20, 2017 7:49 am

ncbill wrote:So you didn't understand that any POA was void upon death, and then the bank dragged its feet about paying the medical bills, even though the bank (only the bank?) was named as successor trustee?
From my reading, TBillT was trying to pay medical bills while the deceased was alive. Bank refused.

As a followup, what is the learning from this, ie. Someone in the mainland US having been added to the account with signatory powers BEFORE the trip overseas ? Bills could have been paid immediately without asking lawyer, asking Bank, asking anyone. Both before and after death.

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TimeRunner
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Re: Unable to Access POA in Revocable Trust

Post by TimeRunner » Tue Jun 20, 2017 9:38 am

Couldn't the hospital have used the patient's credit card? (Obviously not, but I'm not sure why not.)
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Re: Unable to Access POA in Revocable Trust

Post by HueyLD » Tue Jun 20, 2017 9:57 am

TimeRunner wrote:Couldn't the hospital have used the patient's credit card? (Obviously not, but I'm not sure why not.)
My guess is that the patient was incapacitated and unable to sign. It is a well known issue that some patients disputed the credit card charges upon returning to their home countries. Some U.S. hospitals require foreign patients to do cash advance from their credit cards due to past experience with disputes.

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Re: Unable to Access POA in Revocable Trust

Post by TBillT » Tue Jun 20, 2017 11:13 am

TimeRunner wrote:Couldn't the hospital have used the patient's credit card? (Obviously not, but I'm not sure why not.)
Good thought, and that was one thing we wanted to do.
What happens though in this situation, the credit card company sees the large charges from overseas and puts a hold on the card, necessitating a call to the credit card company to free up the card. So that is basically the action we wanted the POA to do.

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Re: Unable to Access POA in Revocable Trust

Post by TBillT » Tue Jun 20, 2017 11:16 am

HueyLD wrote:
TimeRunner wrote:Couldn't the hospital have used the patient's credit card? (Obviously not, but I'm not sure why not.)
My guess is that the patient was incapacitated and unable to sign. It is a well known issue that some patients disputed the credit card charges upon returning to their home countries. Some U.S. hospitals require foreign patients to do cash advance from their credit cards due to past experience with disputes.
Yes! this is the exact position we were in, except of course the reverse as we were overseas.

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Re: Unable to Access POA in Revocable Trust

Post by TBillT » Tue Jun 20, 2017 11:27 am

susa wrote:
ncbill wrote:So you didn't understand that any POA was void upon death, and then the bank dragged its feet about paying the medical bills, even though the bank (only the bank?) was named as successor trustee?
From my reading, TBillT was trying to pay medical bills while the deceased was alive. Bank refused.

As a followup, what is the learning from this, ie. Someone in the mainland US having been added to the account with signatory powers BEFORE the trip overseas ? Bills could have been paid immediately without asking lawyer, asking Bank, asking anyone. Both before and after death.
Sounds good!
After I learn more I will post lessons...this POA was one aspect we were still confused about.

One thing we did really good was visit the Embassy to expedite the death certificate to the US lawyer...1-week breaks the world record as far as I know. this can take weeks or months.

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