Power Of Attorney Question and Answers — Questions and Answers

Question 1: True or False: In order to be approved, POA documents must expressly authorize authority over financial activities and bank accounts.

False
True (Correct answer)

Correct answer: True

For a Power of Attorney (POA) document to grant authority over specific financial activities and bank accounts, it must explicitly state these powers. General grants of authority may not be sufficient for sensitive financial transactions. Specific authorization ensures that the agent's actions are legally recognized and accepted by financial institutions.

Question 2: True or False: Both a POA and a letter of attorney have the same function.

False
True (Correct answer)

Correct answer: True

The terms "Power of Attorney" (POA) and "letter of attorney" are synonymous and refer to the same legal document. Both grant one person (the agent or attorney-in-fact) the authority to act on behalf of another person (the principal) in legal and financial matters. The choice of term often depends on regional or historical usage rather than a difference in function.

Question 3: True or False: An example of "real" property is a bank account.

False (Correct answer)
True

Correct answer: False

"Real property" legally refers to land and anything permanently attached to it, such as buildings or trees. A bank account, on the other hand, is considered "personal property" or "intangible personal property," as it represents a financial asset rather than a physical piece of land. Therefore, a bank account is not an example of real property.

Question 4: True/False: A "generic" POA automatically enables an agent to modify the Member's IRA's beneficiary designation.

False (Correct answer)
True

Correct answer: False

A "generic" Power of Attorney typically grants broad authority for general financial management but often does not include specific "superpowers" like modifying beneficiary designations for IRAs or other retirement accounts. Such actions usually require explicit and specific authorization within the POA document due to their significant legal and financial implications.

Question 5: True or False: If the Member becomes unable or disabled, the "durable" POA expires.

False (Correct answer)
True

Correct answer: False

The defining characteristic of a "durable" Power of Attorney is that it remains in effect even if the principal (the person who signed it) becomes incapacitated or disabled. This is precisely why durable POAs are created – to ensure that someone can manage the principal's affairs if they lose the capacity to do so themselves. A non-durable POA, however, would expire upon incapacitation.

Question 6: True or False: A POA remains in effect when the member who signed it passes away.

False (Correct answer)
True

Correct answer: False

A Power of Attorney (POA) is a legal document that grants authority to an agent to act on behalf of the principal during the principal's lifetime. Upon the death of the principal, the POA automatically terminates. At that point, the principal's estate is managed according to their will or state intestacy laws, typically by an executor or administrator.

Question 7: True or False: CME demands that the Credit Union receive all POAs in writing.

False
True (Correct answer)

Correct answer: True

While the specific acronym "CME" isn't universally recognized in this context (it might refer to a specific credit union or regulatory body), it is a standard legal and financial requirement that all Powers of Attorney (POAs) be submitted in writing. Written documentation ensures clarity, provides a verifiable record of the granted authority, and is necessary for financial institutions to accept and act upon the POA.

Power Of Attorney Question and Answers

True or False: In order to be approved, POA documents must expressly authorize authority over financial activities and bank accounts.