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POA & Joint Demand Deposit Account
by John Burnett, BOL Guru
Guru Bio
Question: If a demand deposit account has joint owners (or) and only one of the owners has granted a Power of Attorney, can the attorney-in-fact control the account?
Answer: I wouldn't say the attorney-in-fact could control the account, because he or she would simply become a third signing party, but it's possible that the attorney-in-fact could create problems. Whether one joint owner's attorney-in-fact can be added as an authorized signer may depend on the language in your bank's deposit contract. Check to see if there's a provision that requires any attorney-in-fact (or other authorized signer) on an account to be approved or appointed by all joint owners. If there is no such provision in your contract, one owner's attorney-in-fact could become a signer on the account without the other owner's knowledge or agreement.
Because that could create problems not only for your depositors but also for the bank, Mary Beth Guard and I, in our BOL Learning Connect webinar on Powers of Attorney, suggest that banks consider sending the account owners a simple form letter when one owner's attorney-in-fact has been added as an authorized signer. The goal is to make sure that all owners of the account are aware of the added signer's authority, and have a chance to respond to it, if they wish.
First published on BankersOnline.com 3/10/08
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