Can a Bank Refuse a Power of Attorney?
Using a written power of attorney, a person (called a “principal”) can appoint someone as their agent (often called an attorney-in-fact) to manage their financial affairs. In Minnesota, a written power of attorney that is dated and properly signed is presumed to be valid. Minn. Stat. § 523.04. If a written power of attorney appears to be valid, financial institutions must accept the authority of an attorney-in-fact to exercise a power granted by a written power of attorney. Minn. Stat. § 523.20. In Minnesota, a financial institution such as a bank cannot refuse a written power of attorney that appears to be valid.
What if the Principal has Become Incapacitated?
A written power of attorney that remains in effect after the principal becomes incapacitated is called a “durable power of attorney.” Under a durable power of attorney, the incapacity of the principal has no effect on the attorney-in-fact’s authority. The purpose of a durable power of attorney is to remain in effect after the principal loses capacity. That is exactly why they exist. Financial institutions cannot legally refuse a durable power of attorney merely for being “stale.”
Can a Bank Require Its Own Power of Attorney Form?
Minnesota’s statute governing powers of attorney do not authorize financial institutions to require their own written powers of attorney. A financial institution such as a bank must accept the authority of an attorney-in-fact to exercise a power granted by a written power of attorney. Minn. Stat. § 523.20. A financial institution cannot require a principal to sign a new written power of attorney, which may not even be valid if the principal has become incapacitated.
Similarly, a financial institution cannot require an attorney-in-fact to sign an affidavit attesting that the written power of attorney has not been terminated or revoked. The signature of a person as attorney-in-fact constitutes an attestation by the attorney-in-fact of no knowledge of the termination or revocation of the written power of attorney at the time of the signing. Minn. Stat. § 523.18. The attorney-in-fact’s signature is conclusive proof for any party relying on the attestation that the written power of attorney has not terminated or been revoked. Id. Signature as “attorney-in-fact” is enough. No affidavit can be required.
What Should I Do if a Bank Refuses My Written Power of Attorney?
Any party that refuses to accept a signed power of attorney statutory short form will be liable to the same extent as if it had refused to act on the principal’s own behalf. Minn. Stat. § 523.20. Hire an attorney familiar with the laws governing written powers of attorney and financial institutions such as banks.