Consider the following scenario: you have a Durable Power of Attorney (“DPOA”) which was validly executed by your elderly mother two years ago. Your mother needs assistance with her banking so you take the DPOA to her local branch. Upon requesting that you be added as a signatory on Mom’s checking account, the bank refuses. This presents a difficult situation because Mom needs help using that account to pay her bills.
Can the bank be forced to honor the DPOA? The answer in most cases is “yes.” Florida has a statutory provision that addresses such a situation. Section 709.2120, Fla. Stat. entitled “Rejecting power of attorney” provides that:
(1) A third person must accept or reject a power of attorney within a reasonable time. Four days, excluding Saturdays, Sundays, and legal holidays, are presumed to be a reasonable time for a financial institution or broker-dealer to accept or reject a power of attorney with respect to:
(a) A banking transaction, if the power of attorney expressly contains authority to conduct banking transactions pursuant to s. 709.2208(1); or
(b) An investment transaction, if the power of attorney expressly contains authority to conduct investment transactions pursuant to s. 709.2208(2).
(2) A third person may not require an additional or different form of power of attorney for authority granted in the power of attorney presented.
(3) A third person who rejects a power of attorney for any reason other than as provided in paragraph (4)(a) must state in writing the reason for the rejection.
(4) A third person is not required to accept a power of attorney if:
(a) The third person is not otherwise required to engage in a transaction with the principal in the same circumstances;
(b) The third person has knowledge of the termination or suspension of the agent’s authority or of the power of attorney before exercising the power;
(c) A timely request by the third person for an affidavit, English translation, opinion of counsel, or electronic journal or record under s. 709.2119 is refused by the agent;
(d) The power of attorney is witnessed or notarized remotely through the use of online witnesses or notarization, and either the agent is unable to produce the electronic journal or record, or the notary public did not maintain an electronic journal or record of the notarization;
(e) Except as provided in paragraph (b), the third person believes in good faith that the power is not valid or that the agent does not have authority to perform the act requested; or
(f) The third person makes, or has knowledge that another person has made, a report to the local adult protective services office stating a good faith belief that the principal may be subject to physical or financial abuse, neglect, exploitation, or abandonment by the agent or a person acting for or with the agent.
So, if all criteria are met in favor of the DPOA, what if the financial institution or bank still rejects it? In that instance, legal action can be taken seeking:
- A court order mandating acceptance of the DPOA; and
- Liability for damages, including reasonable attorney fees and costs, incurred in any action or proceeding that confirms, for the purpose tendered, the validity of the DPOA or mandates acceptance of the DPOA.
If you have a situation where a DPOA has not been honored, consult an attorney. In all likelihood, having the attorney send a demand letter to the financial institution may get results. If not, then it sets the scene for filing a lawsuit against the party refusing to honor the DPOA. A financial institution or bank will not want to risk paying damages and attorney’s fees as a result of their refusal.