Can a Bank Reject a Power of Attorney in Florida?


In 2011, Florida passed the Power of Attorney Act that has had a significant impact on the then existing law in an attempt to achieve greater consistency and uniformity throughout Florida. One big change the act brought about was the codification of laws regarding a third party’s ability to reject a durable power of attorney.


Now the law states that once a power of attorney is presented to a third party, the third party is required to accept or reject the power of attorney within four business days and to provide a written explanation for rejection unless the third person is not otherwise required to engage in a transaction with the principal.


Third parties in these cases are usually banks and other businesses. The issue arises when a third party questions the power of attorney or the authority of the agent, and then refuse to honor a power of attorney. First, it is important to note that banks are offered a number of protections that encourage a bank to accept the validity of a durable power of authority. Florida law provides that if a business accepts a power of attorney that appears to be valid on its face, the bank will not be liable for accepting the power of attorney. The bank will only be liable if it knows the power of attorney has been revoked and still accepts the power of attorney.


The legislatures in Florida wish to encourage third parties to accept a power of attorney because it allows a principal to plan ahead and allow an agent to act on his or her behalf. The power of attorney is a powerful estate-planning tool that can save a family time and grief. Florida law also likes a power of attorney because it saves the court time and does not require the court to appoint a guardian when the principal becomes incompetent. Therefore, Florida law does not favor a third party that unreasonably rejects a power of authority.


Florida statute 709.2120 states that a bank, or business, cannot unreasonably reject a power of attorney. An agent seeking to enforce a power of attorney against a bank, that has unreasonably rejected the power of attorney, can be awarded costs and attorney’s fees. A bank that rejects a power of attorney does so at its own peril.


In Florida, a court will award fees and costs to a plaintiff when a third party unreasonably rejects a power of attorney.


In Albelo v. Southern Oak Insurance Co., the Court granted the plaintiff’s motion for costs and attorney’s fees under section 57.105(1). Albelo brought a claim for the damages caused by a burglary in the home. Southern Oak paid $1690.00 on the claim, but a few months later Albelo filed a sworn proof of loss, supported by a public adjuster’s estimate for $57,760.66. Southern Oak believed the sworn claim was fraudulent and instigated by Albelo’s son.


Albelo responds that before the burglary occurred, when she was 78 years old, she duly executed a Durable Power of Attorney in favor of her son. Southern Oak did not contest the formalities of the power of attorney’s execution and did not question Albelo’s state of mind when the power of attorney was executed. Instead, Southern Oak persisted that Albelo was required to seek a guardian and be legally deemed incompetent by a court.


A power of attorney was sufficient to manage her affairs, and an incapacity petition and guardianship hearing would be frivolous and a waste of the Court’s time. Therefore, the Court awarded costs and fees to Albelo for not accepting the valid power of attorney.


So when can a bank reject a power of attorney? Florida Statute 709.2120(4) allows a third party to reject a power of attorney within a reasonable time when:

  1. The third person is not otherwise required to engage in a transaction with the principal in the same circumstances
  2. The third person has knowledge of the termination or suspension of the agent’s authority or the power of attorney before exercising the power
  3. A timely request by the third person for an affidavit, English translation, or opinion of counsel is refused by the agent
  4. 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,
  5. 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 action for with the agent.

If a bank or another third party will not accept the validity of a power of authority, contact the Law Office of David Goldman PLLC today.

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