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As part of the estate planning process, you may consider setting up a Power of Attorney (POA) to authorize someone else to manage your finances and property when you are unable to do so. For more information about Powers of Attorney, see Powers of Attorney – What Consumers Need to know, and Powers of Attorney: Bank Requirements.
You may wish to have someone else do your banking for you on your existing bank account – perhaps you are out of the country frequently or physically unable to do your banking yourself. You may not already have a bank account and need someone to cash cheques or make payments from an account on your behalf. It is possible for you to open an account and for someone else holding your POA to do your banking for you. But to do so, both of you must meet the legal requirements imposed on banks and other financial institutions for opening accounts.
When opening any type of bank account, banks and other financial institutions must comply with the requirements of a number of laws and regulations. The identification requirements under Canada’s anti-money laundering legislation (AML), the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its various regulations, are the main consideration. Essentially, under this legislation, financial institutions are required to ensure that they “know their customer” by confirming the identity of anyone who will be using the account.
The ability of a bank to open an account using a POA will vary depending on the circumstances, but generally the bank will require both the Attorney (the person given the authority to act on behalf of another person) and the grantor (on whose behalf the Attorney is acting) to provide identification as required by the AML regulations. This can be particularly challenging if the client (the grantor) is physically unable to visit the branch to allow the bank to confirm their identity.
Unless the Attorney provides sufficient evidence of the client’s mental incapacity, banks may attempt to meet with the client to confirm identity – even if a visit to the client’s home, a nursing home or a hospital is needed. Alternatively, the bank may appoint someone at the care facility to be its agent to confirm the client’s identity.
In some cases, where the bank is unable to meet with the client to confirm their identity, but it has an existing and positive relationship with the Attorney, the bank may open the account but the client will not be able to transact on the account until they go to the branch or are otherwise appropriately identified.
Unless you consent, banks will generally refuse any request by your Attorney to make your account a joint account, because that changes the ownership of your assets to the Attorney. With the authority of the POA, the Attorney can do your banking for you without becoming a co-owner of the account.
This text only provides general information and does not constitute a legal opinion. Since the POA rules vary between provinces, the CBA strongly encourages you to seek advice from a legal expert before making any decision in these matters.