A client of mine has been going crazy as she is the power of attorney for one of her family members, as well as a trustee of the revocable trust for that family member. She has been running all over the place getting affairs in order and is stressed!!!

This client asked for my help to go into one of the major banks (where the money is) with her to speak with a “personal banker/financial advisor” about simplifying and consolidating a bunch of the accounts, as well as making sure that everything is in the name of the trust. I volunteered to help, since estate planning is one of my specialties. Plus, I know this institution will make her life hell if I am not there to wade through the technicalities for her. I knew the odds of the “personal banker” understanding Trust and POA issues is right up there with the odds of me being drafted to the NBA.

I figured the personal banker would not be enthused with having me there, because I am a competitor!!! But hey, it’s not about him, it is about my client.  Plus, if everything goes smoothly, I don’t need to say a word…

The Meeting:

The “personal banker” we met with was a young kid, and sure enough, was absolutely clueless about anything having to do with power of attorneys, springing power of attorneys, trustees on revocable trusts, successor trustees after death has happened, etc. Again, I knew this would be the case before I even walked into the bank. I’ve seen it a million times where banks hire young kids to deal with major league stuff, estate planning for example!

At first, I kept quiet. My client started out discussing details about how she needed to change the titling of the accounts to the trust as well as to make sure her POA is on file, etc. The “banker” then stated that this client I was with was merely the “successor trustee” and currently had no power to do anything – at least until death of the grantor – with any of the accounts at the bank. So, I had to educate him by pulling up the trust on my phone and telling him the successor trustee thing was for after death of the grantor when the revocable trust becomes irrevocable. However, this person is currently one of three trustees of the Revocable trust and can act independent of the other two trustees, per the first few lines of the trust documents. Eventually, I had to educate him that the “trustee” does indeed have the authority. Note: That is how revocable trusts work. They become irrevocable upon death! He did not know this.

He also initially stated that he needed the notarized signature of the grantor, who is currently in the nursing home. I said, “that’s not correct, do we drag her out of the nursing home to go to a bank to get a notary?” he said, “they probably have a notary in the nursing home.” I was trying to not internally combust. At this point, he still does not know what I do for a living because I did not pull the “do you know what I do?” card… Yet…

He even questioned the power of attorney, asking if the person/principal was incapacitated yet. I had to tell him that it didn’t matter because this was not a “springing power of attorney“ and was actually effective right now. He wasn’t going to allow her to act as POA for that individual as well unless we could prove incapacitation. Note: Springing Power of Attorneys only become effective at incapacitation. This was NOT a Springing POA and already in effect!!! He did not know the difference.

With him questioning her power as the trustee and also her power as the POA – even though the documents were right there in front of him – he was effectively “vetoing” any power that she legally had to help her family member.  As I dug into the details, which were above his head, he threw out the line about “we are not allowed to give legal advice.” That is when I “officially” introduced myself and what I do for a living. I then told him, “Actually from a legal standpoint, the trust and Power of Attorney documents in front of you are crystal clear. The legal situation is clear, so there  is no “legal advice” needed. However, you are telling us that from a policies and procedures standpoint, this bank will not accept the legal documents.”

This is when he swallowed his pride and called the document attorneys at the bank to confirm what I was teaching him about. They confirmed. He wouldn’t have done this if I did not push back on him. He initially, until I got more vocal, said “sorry, there is nothing you can do.” If I were not there giving an estate planning dissertation to him, he would’ve had my client walk out helpless. I should send the bank a bill for my time training their employee…

The point is, this made me sick and ashamed that consumers have to go through what she would have gone through without my help. Time and time again, I have seen these banks pull the “we cannot give legal advice” ripcord because they are scared to death of being sued. They will even say this when it is NOT legal advice they are giving, but their ego refuses to be proven wrong. So again, they pull that “ripcord” and send the frustrated client on their way!!! YOU MAY HAVE WITNESSED THIS BEFORE TOO.

Dealing with life savings of retirees is major league stuff where decisions are made based off of millions of dollars. Nothing wrong with being “a kid” but this is not amateur hour.

At the end, and after two hours, the bank did what they were supposed to do from a legal standpoint and my client did what she needed to do. If he knew about estate planning, it would have been a 30-minute meeting. He was a nice kid, and I was patient for a long time, but when misinformation creates undue hardship on my client, some “tough love” was needed.

Unfortunately, people feel that these big banks must have world-class people, because after all, they are big banks with big buildings and big advertising. Well, many times it is kids that are not CFPs, CFAs, CLUs, ChFCs, etc., and have less than a decade of experience.  Granted, there are some very capable professionals in “banks,” and maybe you – the reader – are one of them. However, my opinion is that for the young kids getting that “job” at the bank, they are often given tasks, like estate planning issues, which are above their heads.  Plus, banks try to do everything and specialize in nothing, which leaves the “personal bankers’” knowledge an inch deep and a mile wide.  This is a large contrast to how independent financial professionals work. 

In 1933, congress passed the “Glass-Steagall Act” which basically kept separate the banking functions and investment functions.  Hence, for the longest time, banks were only allowed to do what banks did best – lending money and taking deposits.  They weren’t allowed to do the investment/retirement planning functions that they TRY to do today.   Then, in 1999, with the passage of the Gramm-Leach-Bliley Act, the walls separating banking from “investments” came down.  Now you have banks doing everything from loaning you money, to selling you credit cards, to investing your retirement portfolio.  Specializing in nothing and generalizing in everything.  Well, my experience is a good example of how our clients might be better served if the Glass-Steagall Act or something like it was still in effect.