The Florida legislature revamped its Florida’s Power of Attorney law, which became effective on October 1, 2011, and imposed many new requirements. A Power of Attorney is a document in which a person (the “Principal”) designates another individual to act on that Principal’s behalf (the “Agent”). Florida law provides the option to create a “Durable” Power of Attorney, which is still effective even if the said Principal becomes incapacitated, thereby reducing the potential need for a court-appointed legal Guardian.
Florida statute 709.2120(5) states that a bank, or business, cannot unreasonably reject a Power of Attorney. An Agent looking to enforce a Power of Attorney against a bank, which has unreasonably rejected the Power of Attorney, can be awarded costs and attorney’s fees for legal action taken to confirm the document’s validity. A bank which rejects a Power of Attorney does so at its own peril.
A bank must accept or reject a Power of Attorney within four (4) 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 has proper authority or provisions for the Agent to conduct banking transactions.
A bank may reject a Power of Attorney if it is not correctly executed. A Power of Attorney is properly executed if signed by the Principal in the presence of two (2) Witnesses before a Notary Public under Florida Statute Section 709.21405. Furthermore, Section 709.2106(5), shows that copies are just as effective as the original Power of Attorney document. Therefore, a bank should NOT require an original document.
Generally, a regular 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 a bank rejects a Power of Attorney because it was not properly executed or it is not durable and the principal lacks capacity, then the said bank or institution has a valid reason to do so.
However, the following actions can be initiated if the subject document is properly executed and has the required durable language, but the bank still refuses to honor it.
Florida Statute 709.2119 and 709.2120 allows 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.
Since banks have a responsibility to protect people’s (its customer’s) finances, they may question a Power of Attorney.
Banks, which are presented with a Power f Attorney for the first time, may exercise great caution in reviewing said document for authenticity, and to ensure said instrument was not later revoked by the Principal or one who signed it. While the banks are protected from liability in the state of Florida if the Power of Attorney appears in all respects to be valid, the bank may be compelled to replace stolen funds when it accepted an obviously revoked or fraudulent instrument. With this protection from liability, Florida law requires banks to honor a Power of Attorney presented to it.
Should a Florida bank nevertheless refuse to honor a Power of Attorney, the bank, again, has only four (4) days to provide a written reason for the rejection. Florida banks may legally reject Powers of Attorney on several bases, including, a belief that an elderly person is being subjected to physical or financial abuse by the Agent presenting the Power of Attorney, the bank has requested a lawyer’s opinion or Affidavit from the Agent, but not received one, the bank is aware that the said Agent has had their authority revoked, or the bank believes in good faith that the Power of Attorney is not valid or does not grant, by it’s terms or provisions, the authority that the said Agent is attempting to exercise.
If a bank denies a Power of Attorney, they must state the reason or reasons 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, revoked, or suspended the subject Power of Attorney.
If the readers have any questions or concerns regarding the foregoing topic, please contact the Elder Law Dept. of CASERTA & SPIRITI. Our attorneys are experienced in dealing with Florida banks regarding Powers of Attorney. We can send an inquiry to the bank’s legal department to ensure a proper legal basis is provided in writing for rejection or advocate on the Agent’s behalf to ensure the bank accepts the subject Power of Attorney.