Can Banks Refuse a Power of Attorney?

Sometimes a bank or financial institution won’t accept your POA. What then?

By , Attorney Harvard Law School
Updated 1/28/2022

You've likely heard that a good estate plan includes a power of attorney (POA) for finances—a document that authorizes someone (called your agent or attorney-in-fact) to handle your financial matters if you ever become incapacitated. But sometimes creating a POA isn't quite enough. Though the nearly universal recommendation to create a POA as part of your estate plan may make the document seem airtight, in practice your agent might run into some resistance when presenting a perfectly valid POA to a bank or other financial institution. Here's what you can do about it.

Can a Bank Refuse Access to Your Bank Account If Your Agent Has a Valid POA?

Assuming you created a power of attorney that's valid in your state, can a financial institution still refuse to accept it? Some state laws do allow financial institutions to require additional documentation, such as an affidavit (sworn statement) by your agent. But generally, banks must, by law, accept a POA that is validly made. A few exceptions do exist. For example, if the bank believes in good faith that your agent doesn't have the authority to perform the act requested, or if the bank is aware of a report that your agent might be exploiting or abusing you, the bank doesn't have to accept the document.

Otherwise, banks can face consequences if they don't accept a valid power of attorney. In some states, they're liable for attorney's costs and other costs incurred in the event that you or your agent pursues legal action.

All that said, the reality sometimes looks quite different. Banks are wary of identity theft, scams, and elder abuse, and this wariness can take the form of roadblocks when your agent tries to use your POA to access your accounts. Banks might also stop short of outright refusing to recognize a POA, but their reluctance can take the form of equally inconvenient tactics—like requiring several rounds of internal reviews, during which your agent's hands are tied.

What to Do If a Bank Won't Accept Your Power of Attorney

If a bank won't accept a POA, the first step is to find out why. If the POA was not validly made in the first place—for example, it's not notarized, as required by most states, or witnessed, as required by some states—the simple solution is to make a new POA, if possible.

Common Reasons Why Banks Won't Accept a Power of Attorney

A financial institution might raise objections such as these:

  1. Your POA isn't durable. If the person who made the POA is now incapacitated, the agent can't use the POA unless it's durable—that is, made to last even during incapacitation. In some states, POAs are durable by default, but in other states, the document must include an explicit statement. If the POA isn't durable, and you're an agent trying to help someone who's incapacitated, unfortunately you won't be able to use that POA. You can consult an attorney to explore other options.
  2. Your POA is "springing" but you haven't demonstrated incapacitation. Some POAs are made to be "springing"—meaning that they don't take effect until In this case, the POA usually sets out the procedure for proving that the POA maker is now incapacitated. For example, someone, usually a doctor, might need to certify that you're no longer able to make your own financial decisions. Third parties like financial institutions will take these procedures very seriously, with good reason. But the potential for logistical problems is high. For this reason, a springing power of attorney is not usually recommended.
  3. Your POA is old, or is not on the bank's POA form. Banks might also have less defendable reasons for rejecting your POA. You might occasionally hear that the POA was made too long ago, or does not conform to the bank's own POA form.

Your Options If the Person Who Made the POA is Incapacitated

If the person who made the POA still has the mental capacity to understand what they're doing when they sign a POA, and the consequences of giving authority to someone else, then they can simply make a new POA that resolves any issues raised by the bank. But if the person is now incapacitated, the options at this stage are much more limited.

First, try to make the bank officer pinpoint the exact reason for denying or holding up approval of the POA. Familiarize yourself with your state's power of attorney laws and cite specific sections. For example, some state laws have built-in timelines (such as a bank having to accept a valid POA within a certain number of days), and pointing to relevant laws might be enough to jumpstart or speed up the approval. Escalate the issue to supervisors as needed.

If this back-and-forth doesn't pan out, you can seek out the help of a lawyer, which unfortunately means spending more time and money. Short of taking legal action, there isn't much you can do if you face blatant refusal to accommodate your valid POA. For this reason, if you have the ability and foresight to plan ahead, it's best to circumvent future problems by putting a little extra research in at the time when you or your loved one is making a power of attorney.

How to Avoid Issues With Banks by Planning Ahead

Simply being aware that banks can be reluctant or slow to allow your agent to access your account—despite a valid POA—is a good start. To pave as smooth a road as possible for your bank to recognize your agent's authority to act, take these steps:

  1. Make a list of the financial institutions where you have accounts. This might include the places where you have checking accounts, saving accounts, safety deposit boxes, credit cards, retirement accounts, and investment accounts.
  2. Research each financial institution's process for reviewing and accepting POAs. If or when your agent must access your bank account, what will your agent need to do? Some banks might require a notarized affidavit from your agent in addition to the certified copy of the POA, while require different identification documents from your agent and special cover sheets. Every bank has its own process.
  3. Once you've created a POA, submit the document to the bank for approval before you ever need to use it. In other words, if you're making a durable power of attorney, file it with your financial institutions before you become incapacitated, so that it's already in the system and ready to be used if or when the time comes. For added assurance, you could also ask your agent to try using the POA to make a small transaction.

You can also consider creating a POA on a bank's own power of attorney form, but this process can quickly feel overwhelming if you have assets or accounts at many different institutions. Another option is to combine accounts—for example, rolling over retirement accounts so that you only have one—so that you have fewer forms and procedures to navigate. However you choose to proceed, up-front work with financial institutions can save your agent a great deal of time and grief.

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