A person has a “financial interest” in a foreign account not only if he is the owner of record or holder of legal title, but also if he has signatory authority of the account or maintains it jointly with another person. Signature authority is the authority of an individual to control the disposition of assets held in a foreign financial account by direct communication (whether in writing or otherwise) to the bank or other financial institution that maintains the financial account.

Consider the following example. Megan is a U.S. resident. She has a power of attorney on her elderly parents’ accounts in Canada, but she has never exercised that power. Must Megan file an FBAR reporting her parents’ Canadian accounts? Yes, but only if the power of attorney gives Megan signature authority over the financial accounts. Whether or not Megan ever exercises that authority is meaningless for purposes of the FBAR filing requirement.