Dear Lawyer Mark:

I went to the bank the other day, to open up a checking account for my physically handicapped brother, at his request. He wanted it in his name so I could deposit his retirement and write checks to his church, but for me, and our sister, to get it when he dies. I took the power of attorney with me that he had signed, but they still wouldn’t let me open it, even after I had him call them and talk to them to tell them it was OK. The bank told me I had to use the power of attorney form that the State of Ohio requires. I had a lawyer do the form a few years ago, so I figured it would be OK to use it. What should I do?

— WONDERING IN WILGUS

Dear Wondering:

The bank may have been correct in turning you away, but there is no form required by the State of Ohio. With a power of attorney, a person (known as the principal) gives certain powers to another individual (known as the agent or attorney-in-fact) to act in his or her place. Ohio adopted the Uniform Power of Attorney Act in 2012, and as part of that, set forth a form that may be used by individuals. The Act, however, does not require that particular form be used. In fact, many people get powers of attorney for a specific purpose (such as for a real estate closing if they can’t be present), and the preparing attorneys limit the powers only to those necessary for that purpose.
There are a few potential problems with an older form power of attorney in this case, however. Previously, it was common to just say, “I authorize my agent to do anything I may do” in the power of attorney, with the intention that the grant of power would let the agent do basically anything. In several areas, this does not work anymore.

According to the Act, an agent cannot give gifts of the principal’s property, unless the power of attorney specifically authorizes it. Even then, the agent can only gift up to the amount of federal gift tax exemption per year (currently $14,000) unless the power of attorney specifically authorizes the agent to give more. Likewise, an agent may not create or change a beneficiary or survivorship designation unless the power is specifically granted. This means that you would not be allowed to list yourself and your sister as beneficiaries to the account unless the power of attorney specifically provided you with that power.

Finally, an agent who is not a spouse, ancestor, or descendant may not “self-deal” unless the power of attorney specifically provides it. Self-dealing is when the agent either gives the principal’s property to himself, or enters into some type of agreement with the principal (such as to buy the principals’ car, and then the agent signing all the documents). Because the principal is your brother, the power of attorney would need to specifically grant you all three of the above powers in order to set up the account the way he wants it (and the additional power to give more than $14,000 to his church if he wanted to give more). Given the circumstances, you should see your family attorney to review the form, and prepare a new one if necessary.

Thought for the Week: “Nearly all men can stand adversity, but if you want to test a man’s character, give him power.” — Abraham Lincoln

It’s The Law is written by attorney Mark K. McCown in response to legal questions received by him. If you have a question, please forward it to Mark K. McCown, 311 Park Avenue, Ironton, Ohio 45638, or e-mail it to him at LawyerMark@yahoo.com. The right to condense and/or edit all questions is reserved.