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Bank Rejecting Your Power of Attorney? Here Are Your Options

August 5, 2020 in News

Many of our clients have executed a valid Durable Power of Attorney to allow their agent to handle various financial affairs on their behalf. However, sometimes financial institutions, such as banks, refuse to honor the document and will not work directly with the agent. If a bank, or similar institution, refuses to honor your validly executed Durable Power of Attorney; you have options.

Is the power of attorney valid and it is durable?

A bank may reject a power of attorney if it is not correctly executed. A power of attorney is validly executed if signed by the principal in the presence of two witnesses before a notary under Florida Statute Section 709.21405. Furthermore, Section 709.2106(5), indicates that copies are just as effective as the original power of attorney document. Therefore, a bank should NOT require an original document.

In general, a power of attorney becomes invalid once the principal becomes incapacitated. Florida Statute section 709.2104 allows a power of attorney to be durable (remain effective if the principal becomes incapacitated) if it says: “This durable power of attorney is not terminated by subsequent incapacity of the principal except as provided in chapter 709, Florida Statutes”.

If your bank is rejecting the power of attorney because it was not properly executed or it is non-durable and the principal lacks capacity, then they have a valid reason to do so.  However, what do you do if your document is properly executed and it has the required durable language and the bank still refuses to honor same?

What are the Bank’s options?

Florida Statute 709.2119 and 709.2120 provide actions a bank may take to ensure a power of attorney is valid and reliable. It also outlines the consequences for failure to accept and honor a valid power of attorney.

If a bank denies a power of attorney, they must state the reason in writing and provide that to the agent.  The bank also has the right to request an opinion of counsel from the agent upon providing a written explanation of the reason for the request. The bank may also require the agent to provide an affidavit explaining that the principal has not died or revoked/suspended the power of attorney.

What if the power of attorney is wrongfully rejected?

First, a bank must accept or reject a power of attorney within four days (excluding weekends and legal holidays). Additionally, 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 to conduct banking transactions.

Florida Statute 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 with legal action to confirm the validity of the power of attorney.

At the Elder Law Center of Kirson & Fuller our attorneys are accustomed to dealing with banking authorities regarding powers of attorney. We can work with a bank’s legal department and ensure a valid legal reason is given for rejection or advocate on your behalf to ensure the bank accepts the power of attorney.

We are here to help.  Contact the Elder Law Center of Kirson & Fuller today at 407-422-3017.


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