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#786017 - 07/30/07 09:55 PM Agent to add self to account - prohibited?
Dave M_TCA Offline
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Dave M_TCA
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A question came up in our retail department. We have training going way back that states that we should not allow an agent with an account POA to add themself to an account either as owner or beneficiary unless that power is specifically noted in the power of attorney document.

I cannot find anything in the POA act that states yea or nay to our practice. The reference in our training materials is a statement that is lost to antiquity. Any help in pointing to the right place or if this is even still an issue would be helpful.
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David J Mulkerin, CRCM
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#786052 - 07/30/07 11:43 PM Re: Agent to add self to account - prohibited? Dave M_TCA
rlcarey Offline
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POAs only grant the specific powers that are included in the POA document. They are an appointed "fidiciary" and self-dealing is generally prohibited. I would show a copy of the POA you commonly use to your attorney and ask them whether they think it is allowed by the language that is used. I doubt that it does.
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#786322 - 07/31/07 03:22 PM Re: Agent to add self to account - prohibited? Dave M_TCA
Elwood P. Dowd Offline
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Only reinforcing rlcarey...as a general rule, a fiduciary cannot benefit from his actions. If the POA specifically empowered the attorney-in-fact to name himself as a POD beneficiary or a joint owner, that's fine. If it does not, then he cannot. Again, check with your attorney.
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#786354 - 07/31/07 03:47 PM Re: Agent to add self to account - prohibited? Elwood P. Dowd
Dave M_TCA Offline
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Thanks guys, that was my understanding as well. What I'm getting asked, and I'll probably have to contact our attorney, is where in the Act it states that an agent cannot name themself to the account.
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David J Mulkerin, CRCM
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#786730 - 07/31/07 09:58 PM Re: Agent to add self to account - prohibited? Dave M_TCA
Elwood P. Dowd Offline
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It does not say that in the Illinois statute. It says it in the Florida version, but not the Illinois version. Each state legislature makes its own decisions about how specific a statute should be.

However, the fact that the Illinois statute does not list the things an attorney-in-fact cannot do isn't really relevant. What the statute does say is:

(755 ILCS 45/2‑9) (from Ch. 110 1/2, par. 802‑9)
Sec. 2‑9. Preservation of estate plan and trusts. In exercising powers granted under the agency, including powers of amendment or revocation and powers to expend or withdraw property passing by trust, contract or beneficiary designation at the principal's death (such as, without limitation, specifically bequeathed property, joint accounts, life insurance, trusts and retirement plans), the agent shall take the principal's estate plan into account insofar as it is known to the agent and shall attempt to preserve the plan...



Albeit general, that's a pretty clear instruction to the attorney-in-fact not to go around changing ownership and survivorship provisions willy nilly. That's true no matter whom he would suggest as a preferable POD beneficiary or joint owner. When he wants to name himself as the beneficiary his actions and his judgment are doubly suspect.

Clearly, the specific language of the POA could override that general instruction. If it doesn't then the general instruction controls. Again, your bank's attorney needs to say grace over this; this decision should not be controlled by someone whose legal arguments are always based on: "Show me where it says I can't do that..."
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#791493 - 08/08/07 08:59 PM Re: Agent to add self to account - prohibited? Elwood P. Dowd
Dave M_TCA Offline
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Dave M_TCA
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I agree. I'll just tell them to show me where it DOES say that. Thanks Ken, great advice as always.
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David J Mulkerin, CRCM
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#791792 - 08/09/07 02:38 PM Re: Agent to add self to account - prohibited? Dave M_TCA
tpowers4 Offline
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I used to work for one of the larger banks in the Chicago area, and our Account Maintenance unit used to see signature cards or maintenance requests that would ask to add the POA as a POD per the owner's request. It always seemed a little unsavory, but it was never determined to be illegitimate. Nonetheless, we would ALWAYS call the banker that submitted the request to ensure that the request was made in person by the account owner. If it was not, we asked them to contact the owner to verify the change prior to processing.
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#791818 - 08/09/07 02:59 PM Re: Agent to add self to account - prohibited? tpowers4
Dave M_TCA Offline
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Sound advice, thanks tpowers4.
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David J Mulkerin, CRCM
All opinions expressed are mine and not those of my employer and are not to be taken as legal advice.

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