The State of Wisconsin is currently (as of this writing) considering legislation that is supposedly meant to protect seniors from financial abuse. They are SB428(AB482) and SB429(AB481).
Speaking very broadly, these bills allow banks and security firms to delay or even refuse to allow transactions on a customer’s account if they suspect elder abuse. The problem, however, is that the legislation goes too far.
First of all, a “vulnerable adult” in both bills is defined as anyone who is 60 years of age or older. I work with a lot of people who are in their 60’s or older, on issues such as estate planning, special needs trusts, Medicaid planning, and the like; it is incorrect, and frankly demeaning, to create a legislative presumption that anyone over age 60 is a vulnerable adult.
If these laws pass, anyone who is 60 or older could face a problem where their accounts are frozen, or even refused to allow a particular transaction. If that happens, there are potential costs, which could be severe. You could face late fees, bounced check fees, service fees and legal expenses to get the matter fixed. At the same time, the banks are held harmless, even if they make a mistake.
Further, the legislation will allow the financial institution to disregard your Durable Power of Attorney if it believes that your agent is perpetrating financial abuse. Banks have a long history in this country of refusing powers of attorney for no good reason. Because of that, many states, including Wisconsin, have passes legislation that now requires banks or other financial institutions to honor bona fide powers of attorney. These bills would essentially trash that law, and again hold banks harmless for refusing to honor a power of attorney.
The drafters of this legislation presumably have the best interest of elders at heart, but these laws, in their current form, should not be passed, or if passed, should not be signed by the governor. These bills need a lot more work and should be sent back to the drawing board.