what to do when someone refuses to honor special power of attorney

If you find yourself facing a refusal, that is not easily resolved, you may need to seek a court order that will force the third party to honor your authority. In that case, the law allows you to collect attorney’s fees if the third party unreasonably refused to accept the POA.

Full Answer

Can a third party refuse to honor a power of attorney?

Not on the proper form – financial institutions, in particular, often refuse to honor a POA if it is not on their own POA form. Legally, a third party usually is required to accept anyvalid POA; however, if the Principal is available it is often easier to just execute a new POA on the third party’s form than to argue the issue.

Can a company refuse to accept a power of attorney?

under a power of attorney can be frustrated when banks, brokerages, or title. companies refuse to accept the authority granted to the agent under a duly. executed power of attorney. This can happen. even though the power of attorney appears to be valid.

What can be frustrated under a power of attorney?

under a power of attorney can be frustrated when banks, brokerages, or title. companies refuse to accept the authority granted to the agent under a duly.

How an agent uses the authority granted in a PoA?

An Agent’s authority under a “durable power of attorney” survives the incapacity of the Principal. How an Agent Uses the Authority Granted in a POA Once an Agent has been granted authority under a POA, using that authority shouldbe relatively simple. Legally, a POA gives the Agent the authority to act on behalf ofthe Principal.

What Do I Do If a Third-Party Won’t Honor a Power of Attorney?

For the most part, a Power of Attorney is governed by state law with most states imposing some limits on the authority that can be granted to an Agent in even a general POA. Nevertheless, the law has long made it clear that a third party is legally required to honor an Agent’s authority when presented with a valid power of attorney. Though the law requires a third-party to honor the authority vested in an Agent under a POA, third-parties sometimes still refuse to honor that authority. The most common reasons given by a third-party that refuses to accept a POA include:

What is a power of attorney?

A Power of Attorney is a legal document that allows you ( the “Principal”) to grant another person (the “Agent”) the authority to act on your behalf in legal matters and transactions. The type and extent of the legal authority you grant to an Agent depends on the type of POA you create.

What is a POA?

A Power of Attorney is one of the most well-known of all estate planning documents. Most people execute one, or are named as an Agent under one executed by someone else, at some point during their lifetime. Although the basic concept behind a Power of Attorney (POA) is relatively simple, putting a POA to the test can become problematic. For example, what do you do if a third party – a bank or another financial vendor – refuses to accept a POA? To help answer that question, the Overland Park estate planning attorneys at Parman & Easterday explain what happens if a third party refuses to honor a Power of Attorney .

Does a POA expire?

Some banks have created internal policies to refuse to accept a POA if it is more than five years old. In reality, however, a POA never “ expires.” It could have a termination date included in the POA or it could have been revoked, but it does not expire nor can one be “stale.”

Can a third party require a POA?

Legally, a third-party cannot require a POA to be executed on their own form; however, if it is possible to get the Principal to do so, it is often easier to simply comply than to challenge the third-party.

What happens if a third party refuses to accept a POA?

In that case, the law allows you to collect attorney’s fees if the third party unreasonably refused to accept the POA.

Why do third parties refuse to honor POA?

Some of the most common reasons given by third parties include: The POA is “sta le” – a very common excuse given by third parties for refusing to honor a POA is ...

What Is a Power of Attorney?

A power of attorney is a legal agreement whereby the Principal (the person granting authority) grants authority to an Agent to act on behalf of the Principal in legal matters. The extent of the authority granted to an Agent by a Principal will depend on the type of POA the Principal executed. Under a general POA an Agent has virtually unfettered authority to act, meaning the Agent can use the POA to do things such as withdraw funds from the Principal’s bank account, enter into a contract in the Principal’s name, and even sell assets owned by the Principal. On the other hand, an Agent with a limited, or special, POA only has the authority specifically enumerated in the POA agreement. A parent, for instance, might grant a caregiver a limited POA that allows the caregiver (Agent) to consent to medical treatment for a minor child in the parent’s (Principal’s) absence. In addition, because the authority granted under a traditional POA terminated upon the death or incapacity of the Principal, the “durable” power of attorney was created. An Agent’s authority under a “ durable power of attorney ” survives the incapacity of the Principal.

How does an agent use the authority granted in a POA?

How an Agent Uses the Authority Granted in a POA. Once an Agent has been granted authority under a POA, using that authority should be relatively simple. Legally, a POA gives the Agent the authority to act on behalf of the Principal.

Why is POA stale?

The POA is “stale” – a very common excuse given by third parties for refusing to honor a POA is that the authority granted therein is “stale” because the agreement was executed some time ago . Legally, this is not a valid reason to refuse to honor the POA; however, because trying to use an old POA so often leads to problems, it is a good idea to have the Principal update the POA every three to five years just to avoid problems.

How often should a POA be updated?

Legally, this is not a valid reason to refuse to honor the POA; however, because trying to use an old POA so often leads to problems, it is a good idea to have the Principal update the POA every three to five years just to avoid problems.

What can an agent do with a POA?

Under a general POA an Agent has virtually unfettered authority to act, meaning the Agent can use the POA to do things such as withdraw funds from the Principal’s bank account, enter into a contract in the Principal’s name, and even sell assets owned by the Principal.

Can a financial institution refuse to honor a self prepared document?

These self prepared documents also tend to be too vague. Financial institutions – more specifically their legal departments – will scrutinize these documents. If the language in the document does not cover the specific task the agent is looking to carry out, the financial institution will likely refuse to honor it.

Can a POA be notarized without a witness?

Every effort should be made to have it notarized with a notary stamp and/or seal before two witnesses. It can be done without witnesses but if there is a question about validity there are 3 potential people who can support its validity.

Reasoning other parties may use

Many times, another person will refuse to accept your POA because he or she is unsure it is valid. You must give the person a reasonable amount of time to review the POA and validate it. The other party may check to ensure it is real and that the issuer has not revoked it.

Taking the other person to court

If the refusal to accept your POA causes damages to you or the person you represent, then you may have a case in court. The court may order the other party to pay you damages, along with the expenses you incurred by going to court.

Question

I have a POA that was drawn up by my brother’s attorney last month. I am trying to get access to his bank account at a credit union. The credit union has denied me any access because it is a joint account with his granddaughter. Unfortunately, his granddaughter is taking his money out of the account and has caused many overdrafts.

Response

This can be a problem with durable powers of attorney. Financial institutions often refuse to honor them for one bogus reason or another. The credit union has no right to deny you access. But, unfortunately, sometimes fighting credit unions and banks is like fighting city hall. It doesn’t matter that you’re right given the cost of doing battle.

What is a POA?

A durable power of attorney (POA) allows the person creating the document, called the "principal," to name a trusted agent who can act on his behalf in almost any situation. It is very frustrating, then, when a bank financial institution refuses to honor a POA, thus eliminating the benefits and convenience that the principal had desired ...

What did Clarence Jr. sue?

Clarence Jr. sued Bank of America under the Florida law that imposes penalties on financial institutions that refuse to honor reasonable requests from agents named in properly executed POAs. In November 2009, after a week-long trial, a Florida jury returned a verdict against the bank and awarded $64,142 to Clarence Sr.'s estate.

Did Bank of America act reasonably when it rejected Clarence Jr.'s request?

The jury found that Bank of America had not acted reasonably when it rejected Clarence Jr.'s request, even though the joint owner of the bank account had not agreed to the release of the funds.

Did Bank of America honor Clarence Jr.'s request?

of stealing his father's money, Bank of America refused to honor Clarence Jr.'s request.