What Are the Reasons Why Financial Institutions Reject a Power of Attorney?
A power of attorney (POA) is a legal document that gives someone the authority to act on your behalf. A financial POA authorizes your appointed agent or attorney-in-fact to handle your financial matters if you become incapacitated.
A lot is at stake when you give away power over your finances. So you should consult legal experts from an Orlando estate planning law firm. However, creating a POA is not enough. Your agent may run into some resistance when presenting the POA to the bank, sometimes due to the following reasons:
The POA Is Not Valid
A bank may reject an incorrectly executed power of attorney. A POA is validly executed if signed by the principal in the presence of two witnesses before a notary, according to Florida Statute Section 709.21405. Duly signed copies of a POA should be as effective as the original document. Consult estate planning lawyers in Orlando on how to make your POA valid.
The POA Hasn’t Been Activated
Some POAs only become active when the principal becomes incapacitated. Until then, the POA may be springing. Incapacitation must be proven according to the terms spelled out in the document. For example, one or more physicians must have examined the principal and determined they can’t manage their affairs due to mental incapacitation.
Given the circumstances, the bank will want to see the POA and the physician’s letter to satisfy the requirements for activating the POA. Other documentation may also be necessary to facilitate the activation of the POA, giving the agent the power to act on your behalf. Consult skilled Orlando estate planning attorneys to help you make the activation successful.
The POA Is Not Durable
If you become incapacitated, your agent can’t use the POA you created unless it is durable. In other words, you must have made the POA long-lasting, even during incapacitation. While POAs are durable by default in some states, you must explicitly state so in the document to make them durable.
The POA is Too Old or Stale
Even if you’ve done everything right and the bank should recognize your agent, it may still not give access to your bank accounts. That may happen because the document is too old, implying it is stale. The bank assumes that if the record is over a few years old, you may have revoked the POA or signed a new one to replace the old one.
It’s, therefore, vital to keep your POA documents fresh by signing a fresh one every few years. Your estate planning attorneys in Florida can guide you on how often you should refresh your POA documents.
What If the Power of Attorney is Wrongfully Rejected?
A bank must accept or reject a power of attorney within four business days. Additionally, the bank may not require you to sign their POA form if the one presented to them is valid and adequately authorizes the agent to handle your banking transactions.
According to Florida Statute 709.2120 (5), a bank that rejects a valid POA document will be liable for damages, including attorney’s fees and costs associated with legal action to confirm the validity of the POA.
What Can I Do If a Bank Rejects a POA?
Even with the best preparation and everything in place, you may still incur problems when making the bank recognize your POA document’s validity. The situation is understandable because financial institutions don’t just grant access to customers’ accounts. They could face legal action if they let the wrong people access the accounts.
To prevent a tussle between your agent and the bank concerning your POA, here are the steps you can take:
Research Your Bank’s POA Requirements
By researching your bank’s POA requirements, you will have the best defense against refusal. Meet with your bank manager and learn all you need to know about the document.
A local estate planning attorney would have practical knowledge of the financial institutions that are less likely to create a difficult time for your agent over the POA. Having this information before incapacitation is your best bet to avoid trouble later.
Set Up the POA Early
It’s prudent to create your POA while you still can fully control your faculties. Adequate planning lets you choose the person you’re most comfortable with as your agent without feeling pressured. You can also decide whether to make the powers you authorize narrow or broad, remembering that the POA can be invoked at any time.
Choose the Right Attorney to Help You Set Up the POA
Every power of attorney document is different, and its implications can be long-lasting. Avoid downloading some “standard form” from the internet or getting online legal advice when creating the document. Working with legal experts from a reputable real estate, corporate law, family law, and personal injury law firm in Orlando is your best bet for doing everything right.
They can review the document and ensure the provisions meet your specific planning needs. While you may worry about the costs of hiring a lawyer to help you, the return on investment is often worth it in the long run.
An Experienced Estate Planning Attorney Evaluating Your Power of Attorney Document
A POA of attorney is a legal document that banks shouldn’t have a reason to reject if done correctly. However, circumstances may arise beyond you that make the document unacceptable. You can reduce the chances of having the document rejected by ensuring you take the proper steps when creating it. A skilled estate planning lawyer in Florida can guide you.
The lawyers at our Orlando real estate, corporate law, family law, and personal injury law firm are accustomed to dealing with banking authorities in relation to powers of attorney. We can work with the bank’s legal department to check if the reason for rejection is valid and help you appropriately. Contact us to schedule a FREE, safe, and secure case evaluation.