28 Hoosier Banker June 2015 aBout ComplianCe ConneCtion In order to address compliance inquiries from members, IBA provides Compliance Connection, an assistance program offering advice on Indiana-specific compliance questions. If the matter requires legal advice, IBA Compliance Connection will refer the bank to a law firm. The material in this issue was prepared by Larry C. Tomlin, partner with Krieg DeVault LLP, Indianapolis, and IBA compliance consultant. Submit Compliance Connection questions to IBA’s Amber R. Van Til at avantil@ indianabankers.org or Josh Myers at jmyers@indianabankers.org. COMPLIANCE CONNECTION Question: Two different persons have presented the bank with a power of attorney, asserting that they are the attorney in fact for one of our depositors. One of the powers of attorney is dated more than 15 years prior to the other. Does Indiana law presume that a later-dated power of attorney supersedes an earlier-dated power of attorney? If not, how many years must pass after the execution of a power of attorney before it goes stale and automatically terminates? How © 2015 Krieg DeVault LLP THINKING BEYOND TRADITIONAL SOLUTIONS FOR FINANCIAL INSTITUTIONS FOR OVER 130 YEARS • Corporate Representation • Mergers and Acquisitions • Capital Offerings • Regulatory • Compliance • Supervision and Enforcement • New Product Development • Litigation • Commercial / Consumer Loan • Creditors’ Rights • Trust • Tax • Securities • Employment • Intellectual Property One Indiana Square • Suite 2800 • Indianapolis, Indiana 46204 p: 317.636.4341 f: 317.636.1507 INDIANA • ILLINOIS • GEORGIA • FLORIDA • MINNESOTA www.kriegdevault.com should the bank determine whose instructions to follow with respect to the depositor’s account? Answer: Indiana law does not presume that a later-dated power of attorney supersedes an earlier-dated power of attorney, nor does a power of attorney go stale and automatically terminate as a result of the passage of time.1 A power of attorney is terminated only by either: a written revocation signed by the person granting the power (the “Principal”); the death of the Principal; or the occurrence of an event of termination specifically stated in the power of attorney itself.2 Assuming that both powers of attorney satisfy the requirements for validity — the power is granted in writing, names an attorney in fact, gives the attorney in fact the power to act on behalf of the Principal, is signed by the Principal and is notarized3 — both powers of attorney may be in effect. If the attorneys in fact are acting in concert and are providing the bank with joint instructions, this situation is easily manageable. Such a situation, however, is not always the case. When more than one attorney in fact is named, Indiana law specifically authorizes both attorneys in fact to act independently, unless the power of attorney provides otherwise.4 This can create a dilemma if the bank receives contradictory instructions from each attorney in fact. The bank is entitled to rely on a power of attorney without
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