Will Your Loved One’s Bank Accept Your Power of Attorney?

by Rev. Bill Gruenewald

There are some things you just don’t want to learn the hard way — like the fact that the milk expired a week ago or that your car insurance doesn’t cover as much as you thought. Another one is finding out your power of attorney (POA) documents aren’t recognized by your loved one’s bank. You don’t want the first time you’re hearing about that issue to be when your parent is incapacitated and you need to access their accounts. By then, there’s little you can do to fix it without great effort and expense.

Unfortunately, this happens more often than you might think. In most states, banks are not required to recognize financial POAs that were not established using the bank’s own forms. So you could show up to the bank with your POA documents in hand and still be rejected. It’s understandable given the potential for fraud; banks don’t want to be held responsible for giving the wrong family member access to a checking account or enabling a scammer. But the extra precautions mean you have to fully understand the POA requirements before the time you actually need to utilize it. Otherwise, you could be up a creek.

There are a number of reasons POAs can be refused at the bank:

1. The POA isn’t “durable”

“Durable” powers of attorney are those that remain in effect even after the principal (the person for whom you’re making decisions) is incapacitated and unable to make decisions for themselves. If it is not durable, the POA is only applicable if the principal is of sound mind. Most caregivers and family members who are assigned as an agent will want to make sure the POA is durable.

2. The POA is “springing”

“Springing” powers of attorney only take effect when the principal is incapacitated. This might sound like a good option, but keep in mind that for the POA to apply, at least one doctor would have to verify that the principal is unable to make financial decisions for him or herself, and a bank would want to see that documentation as well as the POA and any other documentation that would verify these claims and satisfy their requirements.

3. The POA is “stale”

A bank might see a POA as “stale” if it is too old, depending on their requirements. As a general rule, we recommend signing a new POA every five years to keep it recent.

4. The bank requires filling out their forms in every case

Even if you meet all the requirements — your POA is recent, “durable” and is not “springing” — they can still reject it if they have their own required POA forms. Whether you’re establishing a POA for yourself or being designated as an agent for a loved one, be sure to inquire with the principal’s banking institution about their requirements for POAs.


If the POA is rejected by the principal’s bank, there are a few courses of action, but none of them are simple. If the POA is not recognized and the principal is already incapacitated, there may be little recourse other than for the agent to take legal action against the bank or file with a court to become the legal guardian of the principal, which could be time-consuming and expensive, not to mention making a private matter rather public.

Some states have passed laws that allow for the creation of a statutory short form power of attorney (SSFPOA), which banks are required to accept, assuming it is valid on its face. It has a specific format that cannot be altered, so it allows consistency across all users and banks. 

Though there are ways to address the issue after the fact, the best plan of action to avoid complication, stress, and confusion is to simply think ahead. 

The last thing you want to be worried about when your loved one is unwell and you’re helping with their finances is proper documentation. So when you’re discussing this matter with them, it’s critical to contact their bank and find out what their requirements are for POAs. They may require you to fill out their own specific forms, and you might be required to fill them out in person or simply have them notarized. They may not require any special documentation, but it’s critical to know this ahead of time.

Ready to Get Started?

If you have any questions about POAs, we would love to help. The Tennessee Baptist Foundation is here to walk with you every step of the way, whether you’re establishing a POA, creating an estate plan, or setting up legacy giving at your church. You can reach us via phone at (615) 371-2029 or fill out this form.

Please note that the advice offered in this article is not intended to be construed as tax, legal or accounting advice. This material has been prepared for general informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice for the reader. You should consult your own tax, legal and accounting advisors before engaging in any transaction.