Why Some Banks Won’t Honor a Power of Attorney
A Power of Attorney (POA) is one of the most practical, protective tools you can put in place long before you ever need it. It’s designed to keep your life running smoothly if you can’t manage financial or legal matters yourself, whether because of illness, injury, or another unexpected event.
But even with a signed POA in hand, your bank can refuse to honor it. If that happens when you’re incapacitated, your agent—the person you trusted to step in—may not be able to access your accounts, pay your bills, or handle urgent matters on your behalf.
The good news is, Georgia law has made POA more user-friendly in recent years. With the right precautions, you can prevent nearly all POA rejections before they happen.
Want to skip to the action steps? Download our free estate planning guide, which covers Power of Attorney.
Common misconceptions about Powers of Attorney
Before we talk about what a reliable POA should look like, let’s clear up a few common misunderstandings. These myths lead people to create POAs that look complete, but fall apart when they’re needed most.
Myth #1: “A POA works for everything.”
A POA is powerful, but it’s not limitless. For example, your agent can’t:
- Modify your will or trust
- Add themselves as a beneficiary
- Complete actions you didn’t authorize in writing
Make sure your POA clearly lists the powers you want your agent to have, and understand up front what it can’t do.
Myth #2: “My agent can use my POA as soon as they need to.”
Not always. Depending on how your POA is written, your agent may need to prove you’re incapacitated before they can act. This is especially common with older POAs that used “springing” powers, which only activate after a doctor’s letter.
To prevent delays, use Georgia’s current “immediate” POA format unless you have a specific reason not to.
Myth #3: “My POA lasts forever.”
A POA is only valid during your lifetime. It ends automatically when you pass away. After that, your executor or trustee takes over. This is why a POA is never a sufficient estate planning tool on its own. You should have a POA and a standby guardian (if you have kids) who can step in during your lifetime, and a will or trust to handle everything after. These documents work together, not interchangeably.
Why a bank might reject your Power of Attorney
Banks don’t reject POAs to be difficult; they’re trying to prevent fraud and avoid liability. But their internal policies can cause real harm when a POA isn’t drafted correctly.
The most common reasons a POA is not accepted include:
- Your POA was drafted before 2017: In 2017, Georgia introduced the Uniform Power of Attorney Act (UPOAA), which standardized POAs across the state. Under this law, POAs must use specific statutory language, and banks must accept the new format unless they suspect fraud.
- Non-standard language: DIY templates, out-of-state forms, or attorney-drafted documents that don’t follow Georgia’s preferred format may cause confusion or raise fraud concerns.
- Your bank has its own form: Some large national banks prefer their own POA documents for internal consistency, which could leave people stuck in a loop if they were incapacitated and couldn’t sign the bank’s form. However, under the 2017 POA law, banks are required to accept Georgia’s standardized form.
- Your bank suspects fraud: Even under the updated law, banks can still refuse a POA if they have reasonable cause to believe that: your signature isn’t valid, you lacked capacity when signing, the document has been altered, or your agent is acting suspicious.
What happens if your Power of Attorney is rejected?
If your POA is rejected and you’re incapacitated, your loved ones’ options become extremely limited. They may need to petition the court for either conservatorship (to manage your finances) or guardianship (to make personal decisions on your behalf).
This process is time-consuming, expensive, and emotionally draining, and it gives the court far more control than you likely would have chosen. If your POA meets the 2017 standards, you can push back by providing the bank with the relevant legal citations, but older POAs have no such protections.
How to make sure your Power of Attorney is accepted
Here’s what you can do right now to prevent delays, complications, or court involvement later:
- Update your POA to the 2017 form: If your POA was drafted before 2017, there’s a chance it might get rejected. Update your documents to meet current Georgia statutory standards, even if the old one “looks fine.”
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- Name a trustworthy agent: Make sure your trusted agent is competent, reliable, and alive, and update your POA immediately if your choice changes.
- Add it to your records early: Submit your POA to your bank as soon as you can, and ask them to confirm they will accept it. Get it properly witnessed and notarized, and ask your bank to confirm acceptance before putting it on file. That way, you don’t have to wonder.
- Review every few years: Take special care after major life events, such as marriage or divorce, health changes, moving to a new state, or adding/removing agents.
- Keep copies accessible: Tell your agent where to find them, and keep your paperwork in a clear, accessible location.
FAQs
Do banks in Georgia have to accept my Power of Attorney?
They must accept POAs that meet UPOAA standards unless they have reasonable cause to suspect fraud.
Will a bank accept an out-of-state Power of Attorney?
Not always. Georgia strongly favors its 2017 uniform standards form.
Can I use a POA to manage someone’s account after they pass away?
No, a POA ends at death. Estate management is handled through a will or trust.
How often should I update my POA?
Every 3-5 years is a good rule of thumb, or after a major life change (such as marriage, divorce, having a child, etc.).
Make sure your POA works when you need it
A Power of Attorney is one of the strongest tools available to protect yourself and the people you trust, but it’s only effective if it meets Georgia’s uniform standards and doesn’t trigger any red flags. Even a short conversation with an experienced estate planning attorney can ensure that your documents are clear, enforceable, and ready to work when you need them.
Want help? Schedule a call to talk about POA or any of your other estate planning questions.
