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Power of Attorney Denied: Here’s What You Can Do

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Have you ever had a power of attorney denied, or rejected by a bank as invalid? If you have, then you know how aggravating a power of attorney denied can be.

Anyone in the field of elder care will tell you that a power of attorney is an essential document. As a loved one ages, they may find themselves unable to handle the daily tasks that once seemed routine, such as paying bills, reconciling credit card statements, and balancing a checkbook. This is particularly true if a senior is dealing with cognitive decline, a condition which, if they’re unprotected, leaves them wide open to the scam artists lurking out there.

But what if the power of attorney document you’ve relied on as your protection is rejected by a bank or other financial agency as somehow invalid? This frustrating and troubling situation is the subject of this recent article from AARP, one of several similar ones we’ve seen recently. This one was written for AARP by Amanda Singleton, attorney and elder advocate, who has first-hand knowledge of the issue. Let’s take a look.

“An Impossible Task” when Power of Attorney Denied

“A durable power of attorney (DPOA) is one of the most important tools in a caregiver’s toolbox,” Singleton begins.

This legal document nominates a person, called an “agent”, to help you with your finances if you become sick or unable to handle them on your own. “The majority of caregivers handle some financial coordination for a friend or loved one — like paying bills from their care recipient’s accounts, managing investments or handling insurance claims. And without a power of attorney (POA), it can be a frustrating and almost impossible task,” Singleton writes.

Moreover, she speaks from experience. Singleton became a sudden caregiver for her mom, who did not have a POA prepared. “She spent weeks in the hospital and rehab after brain surgery and it was maddening for me to do even the simplest tasks, like paying her utility bill that became overdue while she was hospitalized,” Singleton recalls. “Thankfully, she recovered enough to sign a POA when she was of sound mind. If not, I would have had to go through the expensive and time-consuming process of becoming her court-appointed guardian.”

This, Singleton notes, would have been a very difficult thing to do, because she would not have been able to pay for her mother’s bills and expenses on her own. She needed to have access to her mother’s funds in order to stay on top of every charge.

Power of Attorney Denied by Banks – Why?

So, here’s the rub: every caregiver who needs to access your finances needs either a POA or a court order in order to do so. But banks or financial institutions sometimes decline to accept a POA when it’s presented to them. Why? The simple answer is fear of fraud.

“Banks are on high alert for elder financial exploitation and scams; if there is a question about the validity of the POA, they may deny its use,” Singleton explains.

Here are some of the reasons Singleton has heard for why banks reject a POA:

  • The POA doesn’t meet the state’s requirements for language or how it’s signed.
  • The POA is extremely old. 
  • The POA is not durable.
  • The bank wants the person who signed the POA or the agent or both to appear in person at the bank to use the document.
  • The bank wants the account holder to use the bank’s own POA form.
  • The bank wants additional documentation from the agent.

Clarify Why Your Power of Attorney Was Denied

“It can be exceedingly frustrating for a bank to disregard a POA, especially if they are wrongfully rejecting it,” Singleton writes. But there are a few steps you can take if this happens to you.

The first thing to do is ask the bank or financial institution for the reason they’re not accepting the POA in writing. Then, look up the law in your state. “There may be procedures and time frames that a bank must follow when it decides to reject a POA. Learn what the bank is required to do in these circumstances,” Singleton writes.

It’s important to note that all state laws are different; the document you’re using may not comply with requirements at the bank’s location. “Some states may require a raised seal from a notary or the agent to sign the POA,” Singleton adds. “This is why it’s so important for everyone to update their documents — especially the POA — if they move states of residence.”

The age of the POA is another consideration. If it’s many years old, it might be considered “stale”, or ineffective. The laws might have even changed since the POA was originally signed, or the document may not have the necessary language for the bank to see it as valid. “It’s important to update a POA periodically, so long as the POA maker is capable of making a legal document,” Singleton explains. “If the POA maker is incapacitated (meaning they’re physically or mentally unable to make decisions or do things for themself), then they can’t — and shouldn’t — make any new legal documents.”

Another important word to learn is “durability”, which simply means that a document can be used even if the original maker is incapacitated. “When a person makes a durable POA, the document is intended to let their agent do the job even if the maker is no longer of sound mind. Without the durable part, the agent won’t be able to use the document after the maker loses capacity due to dementia or other medical issues,” Singleton writes.

And lastly, the bank may require that the POA maker and/or the agent appear in person at the bank for a request. Illness or mobility issues could prevent this from being possible. Singleton advises, “It is always wise to have an alternate agent listed in the POA who could step in if needed. If that’s not feasible, the bank needs to be informed why the agent can’t appear and a doctor’s note should be provided to explain the POA maker’s limitations.”

Power of Attorney Denied: When to Escalate

As frustrating as all of this can be, at least some credit is due to the financial institutions. A lot of the time, a request for additional information by the bank before a POA can be used is rooted in security and protection for all concerned. Sometimes, for example, banks might require a doctor to certify that a POA maker is unable to handle their own affairs. It’s a frustrating hurdle, but much more secure than the alternative. 

“However,” Singleton writes, “even if the bank says they want the account holder to use one of the bank’s power of attorney forms, they still should not reject a POA that is legally effective and has the correct language giving the agent the right to conduct banking transactions for the maker.”

Because of this, Singleton suggests requesting that the bank escalate the issue with the POA document to its legal or document review departments. You might also want to reach out to the attorney who prepared the document originally.

“If the bank is seeking the opinion of any in-house legal counsel about the POA, your attorney can assist with communicating with their counsel or bank representatives,” Singleton explains. “Your attorney may also formally record the document in the county and present the certified copy of it to the bank with a letter verifying the validity of the POA.”

Plan Ahead to Avoid Having Power of Attorney Denied

Here at AgingOptions and Life Point Law, you know we love a good suggestion to plan ahead, and Singleton lands her article on this point.  “Before you run into trouble with a bank rejecting a POA during an intensive caregiving time, the maker and agent may want to visit the bank while everyone is healthy and doing well,” she writes. “You can ask that the bank put the POA on file and double check that it meets the bank’s requirements for approval.  You should also call around to the local branches and confirm the information that they would request to see to access an account using a POA.”

And be ready to stand your ground, too. If the POA is valid, still in effect, and genuine, then there should be no reason for the bank to refuse it. “Know that there can be legal consequences if a bank wrongfully refuses a power of attorney; they may be liable for your attorney’s fees and costs if you have to fight them to recognize it,” Singleton concludes.

Our associates at Life Point Law stand ready to assist you with answers to questions about various types of power of attorney documents. Please contact us and let us help.

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(originally reported at

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