Which States have Laws Requiring Financial Institutions to Accept Durable Powers of Attorney?

 In Durable Powers of Attorney


I’ve read that some states have enacted statutes that require financial institutions to honor durable powers of attorney. Do Massachusetts and New York have these statutes? And, I guess this then begs the question, which jurisdiction applies—the bank’s or the client’s?


Photo by Cytonn Photography on Unsplash


Those are important questions because many banks and other financial institutions are notorious for refusing to honor perfectly good durable powers of attorney. Some have a policy, which I call a “staleness” doctrine, under which they will not honor older documents. This is rather perverse since presumably the account holder was more competent and less likely to be subject to undue influence when he signed the older document than he might be immediately before the power of attorney needs to be used.

Other institutions have their own power of attorney forms that they’re more likely to accept. Because of this, we advise clients to check with the financial institutions where they have accounts to see if they have their own forms and, if so, to sign them as well as the general durable power of attorney form that we prepare for them.

In response to the recalcitrance of many financial companies, New York has enacted a law requiring that powers of attorney be honored if certain requirements are met. Massachusetts has not done so.

The law that should govern is the law of the state in which the financial institution is located. So, if a Massachusetts resident has a Massachusetts durable power of attorney and the agent attempts to use it to access an account at a New York bank, the New York law should apply. The power of attorney, however, would have to meet any requirements imposed by New York law. On the other hand, if the account were in a Massachusetts branch of a New York bank, then Massachusetts law would apply.

If you were in the opposite situation, trying to use a New York power of attorney to access an account in a Massachusetts bank, you could argue that New York law should apply because the states are supposed to give full faith and credit to the laws of other states, but I think that would be a more difficult argument to win.


Related posts:

9 Questions to Ask and Answer in Preparing Your Durable Power of Attorney

How Do I Use My Mother’s Durable Power of Attorney?

How Do I Use Father’s Durable Power of Attorney to Access Online Accounts?

Should You Use an Online Power of Attorney Form? Yes and No

Showing 2 comments
  • Queen Jones

    I currently have 3 sons and a very dear friend who is incarcerated. 3 out of the 4 have granted me attorney in fact with power of attorney forms that have been signed by them and notarized by their respective institutions. I have stimulus checks in which they have given me authority to cash and open bank accounts. However the credit union will not honor the document – although they have taken the time to verify the authenticity of each document. They have informed me that I need a state issued ID for the inmates – who have been incarcerated minimum of 3 years. I have the authentic documents , my valid state issued ID, a valid account with the credit union, and valid proof of my residency. They are not allowing me to endorse the check nor perform transactions on their behalf. Is this an acceptable practice allowed in Indiana?

    • Harry Margolis

      I don’t know about Indiana in particular, but it’s probably both illegal and difficult to do anything about. It’s not unusual for financial institutions to put up roadblocks to using durable powers of attorney, even though the legislation authorizing durable powers of attorney is just for this type of situation. First, I’d try another bank. Second, perhaps your local state representative or state senator could intervene. They may have connections with local banks or be able to apply pressure that would get them to cooperate. The third option would be to see if you local television station or newspaper would like to do a story on this. Fourth, I know in Massachusetts there are non-profit organizations advocating for inmates. There may be similar groups in Indiana. Finally, a lawyer could be helpful, but you might have to pay them.

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