Can a Bank Reject my Durable Power of Attorney?
I was recently approached by someone who was concerned because her elderly father was no longer capable of making his own decisions. Prior to coming to me, he had executed a valid durable power of attorney – naming his daughter as his agent (attorney-in-fact). Her specific concern was with regard to her father’s bank refusing to honor the power of attorney document, frustrating her attempt to handle her father’s financial affairs.
Was the power of attorney properly executed?
First, I noted that the power of attorney document was validly executed per Florida Statutes Section 709.21405 (i.e. signed by the principal in the presence of two witnesses before a notary). My client indicated that she could not find the original document and wondered if that was causing the bank to reject the document. I pointed out that Section 709.2106(5) of Florida Statutes, indicates that copies are just as good and effective as the original power of attorney document.
Next, I determined that the power of attorney had not been revoked and that it was durable.
Is the power of attorney durable?
Generally, power of attorney documents become invalid once the principal becomes incapacitated. But Florida Statutes, section 709.2104 indicates that a power of attorney is “durable” (which means will survive the principal becoming incapacitated) if it contains the words: “This durable power of attorney is not terminated by subsequent incapacity of the
principal except as provided in chapter 709, Florida Statutes,” or words to the same effect.
I checked the power of attorney document and, indeed, the appropriate language was in place making the POA durable.
What if my power of attorney is rejected?
Florida Statutes, Sec. 709.2119 and 709.2120 provide steps a bank may take to ensure reliability of the power of attorney document presented to them and consequences for their failure to accept and honor a valid POA document. In fact, on all my durable power of attorney documents, I place the following provision in bold:
- Notice to all who receive a request from this Power of Attorney: You must timely accept this Durable Power of Attorney or face potential liability for unreasonably refusing to honor it pursuant to Florida Statute 709.2120. If you deny the attorney-in-fact’s request, you must state your reason in writing and provide that to the attorney-in-fact pursuant to Florida Statute 709.2120(1)(a). You have the right to request an opinion of counsel from the attorney-in-fact pursuant to Florida Statute 709.2119(3)(b) upon your providing a written explanation of the reason for the request.
Fla. Stat. 709.2119 (From Florida Power of Attorney Act)
This section deals with acceptance and reliance on the power of attorney. If the agent / attorney-in-fact presents a document that seems valid and properly executed and the request is specifically contemplated in the power of attorney document, third parties (e.g. in this case the financial institution) may accept and rely on the document with impunity. The bank may require the agent to provide an affidavit explaining that the principal has not died or revoked/suspended the power of attorney, etc… (a form affidavit is provided for
in Sec. 709.2119(2)(b)).
Fla. Stat. 709.2120 (From Florida Power of Attorney Statute)
This section instructs on potential consequences for failing to honor a valid power of attorney. It indicates that banks, and other financial institutions, must accept or reject a power of attorney within four days (excluding weekends and legal holidays).
The bank may not require that their own power-of-attorney form be used if the one presented to them is valid and contains proper authority for the agent / attorney-in-fact to conduct banking transactions.
709.2120(5) indicates that if a valid power of attorney document is rejected, the bank will be liable for damages, including attorney’s fees and costs in an action to confirm the validity of the power of attorney.
How an elder law attorney can help if a bank rejects a valid POA
After I was retained I faxed some materials to the local bank branch that had rejected the POA (cover letter, copy of Florida Power of Attorney Act, with certain section highlighted, and the previously-rejected power of attorney document). I then called and spoke with the manager. I asked them to conference in their legal counsel. When I was told that this was not possible at the moment, I demanded that they send the documents I already faxed to them back to the bank’s legal department. I explained that there was no legal justification for failing to honor the power of attorney. I then explained the legal consequences – that we would have to initiate an emergency guardianship proceeding, which would likely get expensive – and that they would be liable for forcing my client to engage in this expensive and unnecessary proceeding.
The manager agreed to promptly send my package to their legal department for reconsideration.
After a few days, I received a phone call that the bank had changed its position and would honor the power of attorney.
Florida Durable Power of Attorney Lawyer Resources