Power of Attorney Fails to Unlock $100,000
A son with durable power of attorney for his 91-year-old mother cannot convert her $100,000 Consolidated Edison paper stock certificate to electronic form
A man holds durable power of attorney for his 91-year-old mother, who has dementia and is bedridden in a Virginia memory-care facility. He cannot convert her $100,000 paper stock certificate in Consolidated Edison to electronic form, as reported by MarketWatch's The Moneyist column. The stock-transfer agent, referred to as Acme Corp., requires a medallion signature guarantee for the transfer, which multiple banks and brokerages have declined to provide despite the valid power of attorney.
The Stumbling Block
The core issue is the medallion signature guarantee, or MSG. This certification verifies the signer's identity and legal authority for securities transfers. Crucially, it makes the issuing financial institution liable if the signature is fraudulent. According to the advice column, most banks will not issue an MSG for someone who is not an existing customer with assets on deposit. This explains the son's failed attempts when cold-calling banks and online services.
Companies are primarily concerned with liability. The Moneyist suggests that a medical letter detailing the mother's condition might help. Some institutions do issue MSGs for transactions involving powers of attorney, but policies vary widely. Some refuse outright. Others may require the principal to appear in person. A few will issue them for homebound or incapacitated customers.
Potential Avenues and Alternatives
The son is advised to return to Acme Corp. itself. He should ask its transfer services or escalations department if an MSG is the only acceptable authentication. The agent might accept alternatives like a notarized affidavit, a different signature guarantee program, or a court order. The front-line customer service may not have disclosed this potential flexibility.
Other options exist but come with caveats. Contacting a trust and estate attorney could cost thousands in legal fees. Alternatively, opening a brokerage account in the mother's name and attempting to deposit the certificate via a transmittal might work, but this depends entirely on the specific brokerage's policy for paper certificates.
The Underlying Problem and a Final Option
The Moneyist notes the son is trying to use a power of attorney for a task it wasn't designed for: unlocking a paper certificate from the pre-electronic era. The shares are the only assets in her estate without designated beneficiaries, and the goal is to avoid probate. There is no market-timing urgency, as the shares have not been cashed out for decades.
However, there is a capacity urgency. If the mother's condition declines further, any workaround requiring her personal appearance or affirmation will close. The columnist suggests the son consider filing a small-estate affidavit or summary probate, which is often less expensive and faster than full probate. Most states have limits for this process, typically below $100,000.
