Can a POA withdraw money from a bank account?

Yes, a Power of Attorney (POA) can grant an agent the authority to withdraw money from a bank account, though this capability depends entirely on the specific type of POA and the powers explicitly outlined within the document.

A Power of Attorney is a powerful legal document that allows one person (the "principal") to grant another person (the "agent" or "attorney-in-fact") the authority to make decisions or act on their behalf. The scope of these powers can vary significantly, ranging from very limited, specific tasks to broad, comprehensive control over the principal's affairs.

Understanding POA and Bank Account Access

For an agent to withdraw money from a bank account, the POA document must specifically grant financial powers. Not all POAs include this authority, as some are designed for other purposes, such as making healthcare decisions.

Types of Power of Attorney and Their Financial Implications

The ability for an agent to access and withdraw funds from a bank account hinges on the type of POA in place:

• General Power of Attorney: This type grants the agent broad authority to manage all of the principal's financial affairs, including accessing bank accounts, paying bills, managing investments, and conducting real estate transactions. A general POA is typically effective immediately and remains so until the principal revokes it or becomes incapacitated.
• Durable Power of Attorney: Similar to a general POA in terms of the scope of financial powers it can grant, a durable POA is designed to remain effective even if the principal becomes incapacitated. This is a crucial distinction, as it ensures financial management can continue without interruption if the principal is unable to make decisions for themselves. This is often the preferred type for managing ongoing financial affairs, including bank account withdrawals, in situations of long-term illness or incapacitation.
• Limited (or Special) Power of Attorney: This grants the agent very specific, narrowly defined powers for a particular purpose or for a limited time. For example, a limited POA might authorize an agent to sell a specific property, sign a single document, or access funds only for a specific transaction. It would not typically grant general access to all bank accounts unless explicitly stated for a defined purpose.
• Springing Power of Attorney: This type of POA becomes effective only upon the occurrence of a specific event or condition, such as the principal's incapacitation, as determined by a physician. Once effective, it can grant financial powers, including bank account access, similar to a general or durable POA.
• Healthcare Power of Attorney: This POA grants an agent the authority to make medical decisions on the principal's behalf. It does not typically grant financial powers, including the ability to withdraw money from bank accounts, although POAs in general can grant significant power, extending to critical health decisions.

Key Considerations for POA Agents

When an agent is granted the power to manage financial accounts, including withdrawals, they are bound by certain responsibilities:

• Fiduciary Duty: The agent has a legal and ethical obligation to act solely in the best interest of the principal, not their own. This means all financial transactions, including withdrawals, must directly benefit the principal.
• Record Keeping: Agents should maintain meticulous records of all transactions, including deposits, withdrawals, and expenditures, to ensure transparency and accountability.
• Principal's Intent: The agent must adhere to the principal's wishes and financial goals as much as possible, as outlined in the POA document and any discussions held with the principal.
• Bank Policies: While a POA grants legal authority, financial institutions may have specific requirements for verifying the POA document and the agent's identity before allowing transactions. It's advisable to check with the bank beforehand.

In summary, for an agent to legally withdraw money from a bank account, the Power of Attorney must be appropriately drafted to include financial powers, and it must typically be a general or durable financial POA.