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Joint Bank Accounts & conflicting Power of Attorneys

Rochester, MI |

When there are joint banks accounts, on
savings & CD's with one party having dementia, the joint party is sharing the account. However, there are two Durable Power of Attorneys, one having the joint account. The other is not on the account. These two people share POA, both he same, dated the same day, year. The POA's are detailed for banking transactions for the best interest of the dementia parent.
The POA party that is not on the joint account tried to withdrawal the CD account. Now the bank has frozen the account, neither party cannot access or move it. Doesn't the joint account override any POA, especially when one of the POA;s is on the joint account?
The bank says the family now has to have a court appointed conservatorship to access the money. This seems extreme

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Attorney answers 2


I believe what you are running into is a bank policy that is not necessarily consistent with Michigan law. Here is part of the joint account statute (the words in ALL CAPS are the important ones, you can just read those):

WHEN A DEPOSIT SHALL BE MADE, IN ANY BANK BY ANY PERSON IN THE NAME OF SUCH DEPOSITOR OR ANY OTHER PERSON [JOINT ACCOUNT], and in form to be paid to either or the survivor of them, SUCH DEPOSITS thereupon and any additions thereto, made by either of such persons, upon the making thereof, SHALL BECOME THE PROPERTY OF SUCH PERSONS AS JOINT TENANTS, and the same together with all interest thereon, shall be held for the exclusive use of the persons so named AND MAY BE PAID TO EITHER DURING THE LIFETIME OF BOTH, or to the survivor after the death of 1 of them, AND SUCH PAYMENT and the receipt or acquittance of the same to whom such payment is made SHALL BE A VALID AND SUFFICIENT RELEASE AND DISCHARGE to said banking institution for all payments made on account of such deposits prior to the receipt by said bank of notice in writing not to pay such deposit in accordance with the terms thereof.

In effect, the statute says that joint accounts are property of both persons, may be payable to either person, and payment by the bank to one person releases the bank. The most common example is a husband’s and wife’s joint account, where one becomes incapacitated. Does the bank freeze the account or somehow stop the other spouse from withdrawing funds? No.

What you have is a bank that is reading between the lines and seeing that someone disagrees with what you are trying to do. By making you get a conservatorship, the bank is off the hook because it’s the court making the call, not the bank. If I am reading your summary right, you are not only a joint account holder, you have a power of attorney for the incapacitated account holder (is that correct?)

I would ask the bank for the legal reason why they are making a demand for the conservatorship. You may be able to work your way up to someone who will release the funds to you as a joint owner/POA of the account.

Glenn Matecun
Michigan Estate Planning Attorney | Michigan Probate Attorney


I'm not licensed in MI, so I can only respond in general terms. Where one of two joint account holders grants a power of attorney with respect to his or her interest in the account to two attorneys-in-fact (AIFs) - one of whom is the joint account holder, a mess ensues if the two AIFs do not act in concert, and especially if one takes steps that could, on their face, appear inconsistent with the AIF's duty to the principal.

Legally, the two AIFs and the joint account holder who is one of the AIFs can probably manage the accounts independently. Whether they must join with the other account holder is a matter of the acount agreement. With two AIFs squabbling, the bank is going to take what they determine is the safest route for them - have a court straighten out the mess created by the two AIFs. It's the extreme behavior of the AIFs that has put you in this position - no the bank's.

Consult with a competent local estate planning attorney with conservatorship experience to determine whether there is an alternative to what the bank is asking for at present.

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