Hello,

We have an account holder that has had a health issue that has left them mentally unstable in terms of decision making. There was a POA added to the account to handle the account and now the account holder says they don't remember filling out the paper work and getting it notorized and has requested to have the POA removed. We are have obtained a notorized removal request from the account holder. However, there is a joint on the account that doesn't live with the ill individual, and says she is afraid the individual will blow through the funds in the account.

What moral responsibility do we (as financial institutions) have on top of making sure the paper work is completed and noted in the account. In this case, should we put it on the joint to uphold her account responsibility?

Thanks,

In all honesty, I would refer this to your bank's legal counsel and get an opinion on where you stand and what you should do.

The risk on either side is significant enough that not getting a legal opinion to deal with this issue would be a moral quandry all to itself.

Cheers!

I'm curious as to what you think getting a legal opinion will do? In the end, the bank can't restrict the owner's access to the account, so paying a lawyer $1,500 is going to accomplish what? If you need to resolve a moral quandry, go to your church... it won't cost you $1,500 but it'll get you exactly the same answer, i.e. there is nothing you can do.

If the person truly has dminished capacity, the family members need to take that to a court and have a guardian appointed. The co-owner on the account is perfectly able to withdrawal all the funds from the account if they choose... they are a co-owner. The bank cannot, and should not, be in the business of policing what is a good and reasonable transaction and what is not. Nor can the bank rely on one person's statement that someone else has diminished capacity to make financial decisions... that is a court's job to make that determination. Feel free to tell the co-owner or any one else about that option... it's not legal advice, it's just telling them that you can't restrict access to an account based on a personal opinion.

How do you know the joint owner isn't just trying to protect her (perceived) future inheritance?

It's not the bank's job to police how someone chooses to spend their money. And it's not the bank's job to talk about their customers' mental health status. In my opinion, you cannot prevent an account owner from doing whatever they want with their money unless you have some type of legal document to back it up (i.e. a court document so directing you). I agree with milby that a legal opinion is meaningless to this situation. You have a legal contract with these two owners. Either one is entitled to "blow through" the money any way they choose. Don't get involved.

We are have obtained a notorized removal request from the account holder.

If the customer is mentally unstable how would he get the form notorized?

Eventhough I ask the question above I am still in the camp of Milby and BurntSienna. As much as we would like to we can not protect out customer if he does not wish to be protected. The Customer is the one that needs legal advice.

Well, ultimately a legal opinion is just that.

I personally would get one from my bank based on potential risk of litigation... the argument of mental capacity etc would make me nervous beyond what we all know are the rules in terms of litigation.

I know if I was on a joint account with my father for example, and he was having a hard time remembering who or why there was a POA etc on an account or even going to a notary to have that put on in the first place... and then I called the bank and said, "hey listen my father is having mental health issues and the POA of needs to remain yadda yadda yadda" I being on this side of the bank walls know that there is nothing we can do... but if they ignored me and let him blow through the money I would be pissed... I would also try to stop my father on my own. But that again is just me...

But Joe average doesn't always know or care about the rules, and when Joe average sues the bank for allowing their mentally unstable joint account owner from going wild and blowing through money or what have you... and they say I contacted you on X date and told you... and you still went ahead and ignored me... whether they have a leg to stand on or not it won't stop the lawsuit from happening.

But IMO the legal advice you seek should help in a) proving your legal minimum in a situation of relative ambiguity dealing with mental capacity b) provide additional case law or logic for what courts may or may not be willing to agree is the bank's moral responsibility. In a world where bank's don't have the moral highground anymore and "the legal minimum" isn't always a defensible position. I see the need for a legal opinion to help guide me one way or the other... Even if that opinion is just confirm that I have to honor the wishes of the account holder, regardless of what I know or think I know about his mental capacity.

Clearly others feel there is no moral responsibility for the bank, just what the rules say. Perhaps the OP feels there is. Perhaps a courtroom would agree that there is... Perhaps all the legal opinions in the world amount to the same big fat nothing... Perhaps none of it matters at all, whether you spend the money to get one or you don't spend the money and go with your gut, but IMO there is risk in not getting legal advice on "Moral issues" within banking...

Cheers!

"But Joe average doesn't always know or care about the rules, and when Joe average sues the bank for allowing their mentally unstable joint account owner from going wild and blowing through money or what have you... and they say I contacted you on X date and told you... and you still went ahead and ignored me... whether they have a leg to stand on or not it won't stop the lawsuit from happening."

Then customers sue happy family would sue you for violation of the customers right to financial privacy.

Touche... very well played.

I think you can discuss this in "anonymous" yet specific terms which don't violate the Right to Financial Privacy. Customer X, and Account holder Y, that sort of thing. Similar to the postings here on BOL.

been there

Nonexistent family member who we were tring to reach (after contacting sr service did nothing) would not even return telephone calls, when the mom passes away tries to make us look like the bad guy for not stopping her and taking away "his" money. We went overboard with this customer and risked issues if she complained restricting her withdrawls (she would give away her money strangers at the local OTB so they can bet, even her food money) and calling the local supermarket telling them what she needed to buy.

I do not know what a "removal request" is, but the idea that I can remove my attorney-in-fact from my account is the logical equivalent of thinking I can remove myself from the account. If I want to end the attorney-in-fact's power, I need to revoke the POA, not follow along behind and attempt to void his or her decisions.

I'm at a loss as to how denying the attorney-in-fact access to the account will affect the principal's ability to blow the funds. If the joint account holder feels there is a moral issue then he or she can simply close the account and take any action necessary to have the individual declared incompetent.

The one constant about moral responsiblity is that it cannot be delegated to someone else, in this case, your bank.