When powers of attorney are rejected

Sometimes, banks, and other businesses, will question a power of attorney; most frequently they will insist that “their” power of attorney be used; and sometimes, they question the authority of the agent and simply refuse to accept the power of attorney. In either case, they refuse to honor a power of attorney.

Florida law has long provided that if a business accepts a power of attorney that the appears to be valid, so long as they business does not know that the power of attorney has been revoked, that the business is not liable for accepting the power of attorney; Florida law has also long provided that a business that ‘unreasonably’ rejects a power of attorney can be sued and costs and attorney fees awarded to the agent who is seeking to enforce the power of attorney. The exact language and numbering of the statute has changed over the years, but the point is that a business who rejects a power of attorney does so at its’ own peril.

A recent case in Florida discusses what can happen when a business, in this case an insurance company, rejects a power of attorney:

Albelo v. Southern Oak Insurance Company

It is a bit of a mystery to me why the insurance company rejected the power of attorney; but in a nutshell the court said that the insurance company was wrong, and awarded attorney fees and costs to the son for having to bring a court case to get the insurance company to accept the power of attorney.

The other lesson of this case is, Florida courts will encourage the “least restrictive” means to provide for someone who cannot manage their own affairs; in this case the insurance company was trying to insist that a incapacity petition be filed and that the woman be declared incompetent and have a guardian appointed; if there is a power of attorney in effect, not only will the power of attorney be sufficient to manage her affairs, but could lead a court to reject an incapacity determination as not being needed.
This is one reason why having a power of attorney can be very useful.
As I discuss here:

The Importance of Having Documents in Place Ahead of Time

It can be very important to have these documents. In the case above, because she had a power of attorney, she was able to avoid a guardianship case. If you don’t have a power of attorney, you should seriously consider it. If you have questions about whether you need a power of attorney, please contact my office, which is near the North end of The Villages, conveniently located near Lady Lake, Belleview, Stonecrest and Del Webb Spruce Creek.

If you have a power of attorney and someone is refusing to honor it, you need to contact an attorney. If you are in or around The Villages, Florida, and need a lawyer to review a power of attorney, please feel free to contact my office.

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