What a Power of Attorney Can and Cannot Do With a Joint Account
A power of attorney (POA) has legal authority to act on behalf of the account owner—the person who gave them that power. But a joint checking account has two owners with equal rights, and that creates a conflict. A POA cannot sue the other owner of a joint account without the account owner's permission, because the POA's authority flows from that one person, not from the account itself.
The key distinction: a POA is an agent for one person. A joint account belongs to two people. If the other owner has done something wrong—taken money, refused to pay a shared bill, hidden transactions—the account owner (not the POA alone) is the one with standing to sue. The POA can advise, gather documents, and prepare the case, but the lawsuit must be filed by or on behalf of the account owner.
There is one narrow exception: if the account owner is incapacitated and the POA holds a durable power of attorney that specifically authorizes litigation, the POA may be able to file suit on the owner's behalf. But this requires language in the POA document itself, and even then, the suit is technically brought by the incapacitated owner through the POA, not by the POA independently.
Key Takeaways
- A POA's authority comes from one account owner and does not extend to suing the other owner without that owner's consent or involvement.
- The account owner—not the POA—has the legal standing to bring a lawsuit over misuse of joint account funds.
- A durable POA with explicit litigation language may allow the agent to file suit on behalf of an incapacitated owner, but the document must say so.
- If the account owner refuses to sue and the POA suspects fraud or theft, the POA can report the matter to law enforcement or a bank investigator.
Why Joint Ownership Complicates a POA's Authority
Joint account owners have equal legal rights to all funds in the account. Neither owner needs permission from the other to withdraw money, and neither can unilaterally remove the other from the account (though some banks allow it with proof of death or court order). This equality is built into the account structure itself.
A POA, by contrast, is a delegation of authority from one person to another. It says: "I authorize this person to act in my place." The POA's power is only as broad as the document allows, and it only applies to the account owner's interests. When two owners exist, the POA cannot speak for both of them—only for the one who signed the POA.
If the other joint owner has taken money or made unauthorized transfers, that is a dispute between the two owners. The POA can help the account owner understand what happened and prepare evidence, but the account owner must be the one to decide whether to pursue legal action. If the account owner is unwilling or unable to decide, the POA's hands are tied unless the POA document explicitly authorizes litigation.
When a POA Document Does Authorize Litigation
Some POA documents include language that grants the agent the power to "sue, defend, and settle claims" on behalf of the principal. This language is more common in durable powers of attorney—documents that remain valid even if the principal becomes incapacitated—because they are often used to manage affairs when the principal cannot.
Even with this language, the POA is still acting on behalf of the account owner, not independently. The lawsuit is brought in the account owner's name, with the POA as the authorized representative. The account owner's interests—not the POA's—are what the suit protects. And the POA must still act in the account owner's best interest, not in the POA's own interest.
If you hold a POA and are unsure whether it includes litigation authority, review the document itself or ask an attorney to read it. The language is usually in a section titled "Powers Granted" or "Authority of Agent." If it is not there, you do not have the power to sue on the account owner's behalf, even if you suspect wrongdoing.
What Happens if the Account Owner Refuses to Sue
If the account owner knows the other joint owner has misused funds but refuses to take legal action, the POA cannot override that decision. The account owner has the right to decide whether to pursue a claim, even if that decision seems unwise. A POA's job is to act in the owner's interest, not to substitute the POA's judgment for the owner's.
However, if the account owner is incapacitated—unable to understand what happened or make decisions—and the POA holds a durable POA with litigation authority, the situation changes. The POA can then act to protect the incapacitated owner's interests, including by filing suit if necessary. This is one of the main reasons people create durable powers of attorney: to ensure someone can act if they become unable to.
If you suspect fraud or theft and the account owner will not pursue it, you can report the matter to the bank's fraud department or to law enforcement. A bank investigator can review account activity and may freeze funds or reverse unauthorized transfers. Police can open a criminal investigation if there is evidence of theft or embezzlement. These routes do not require the account owner's permission in the same way a civil lawsuit does.
The Bank's Role: What They Will and Will Not Do
Banks treat joint accounts as belonging equally to both owners. If one owner disputes a transaction made by the other, the bank's position is usually that both owners have equal rights to the account and its funds. The bank will not take sides in a dispute between joint owners without a court order.
If a POA calls the bank and claims the other owner has stolen money, the bank will not freeze the account or reverse transactions based on the POA's word alone. The bank needs either a court order, a police report, or evidence of fraud (such as forged signatures or unauthorized access). A civil lawsuit can result in a court order that freezes funds or requires the other owner to return money, but the lawsuit must come first.
If the account owner is incapacitated and the POA holds a durable POA, the POA can notify the bank and may be able to take control of the account. But this is different from suing the other owner. Taking control of the account and suing over misuse are two separate actions, each with its own requirements.
Steps a POA Can Take Without Filing a Lawsuit
Even if a POA cannot sue independently, there are concrete steps the POA can take to protect the account owner's interests. First, request a full account history from the bank—all deposits, withdrawals, transfers, and fees for the past year or longer. This creates a paper trail and may reveal patterns of unauthorized use.
Second, if the account owner is able and willing, have the account owner send a written message to the other joint owner asking for an explanation of disputed transactions. Keep a copy. This creates evidence that the account owner was aware of the issue and sought resolution.
Third, consult an attorney who handles civil disputes or family law (if the other owner is a spouse or family member). An attorney can review the POA document, advise whether litigation is possible, and explain what evidence would be needed to win a case. Many attorneys offer a free initial consultation.
Fourth, if you suspect criminal activity—forged checks, identity theft, or systematic theft—file a report with local police. Provide the account history and any written communications. A police report creates an official record and may prompt the bank to take action.
When the Account Owner Is Deceased
A POA ends when the account owner dies. The agent's authority to act ceases immediately. If the account owner has passed away and the other joint owner has taken funds, the dispute now involves the estate and the surviving joint owner's rights.
In most states, a surviving joint owner has the right to the entire account balance, regardless of what the deceased owner's will says. This is called the "right of survivorship." However, if there is evidence that the joint account was created for a specific purpose (such as paying bills) and not as a true gift, a court may order the surviving owner to return some or all of the funds to the estate.
The person who can pursue this claim is the estate's executor or administrator, not the deceased owner's POA. If you held a POA for someone who has died and you believe the surviving joint owner wrongfully took funds, inform the executor or administrator and provide them with the account history and any relevant documents.
Frequently Asked Questions
Can a POA remove the other joint owner from the account?
Not without the account owner's consent or a court order. Most banks require both owners to agree to remove someone from a joint account. A POA can request this on the account owner's behalf if the owner authorizes it, but the bank will typically require the account owner's signature or presence to complete the change.
What if the POA and the other joint owner are the same person?
This is a conflict of interest. If one joint owner also holds a POA for the other owner, that person has authority over the account owner's affairs but also has equal rights to the account as a joint owner. This creates a situation where the POA could easily misuse funds. If you are in this position, consult an attorney about whether the arrangement is appropriate and what safeguards should be in place.
Can a POA sue the other joint owner for their share of the account?
Only if the account owner authorizes it or if the POA holds a durable POA with explicit litigation authority and the account owner is incapacitated. A POA cannot sue on the account owner's behalf simply because the POA thinks it is a good idea. The account owner's wishes control, unless the account owner cannot express them.
What if the other joint owner is also incapacitated?
If both owners are incapacitated, the situation becomes complex. Each may have a separate POA, and those two agents may disagree about what should happen to the account. A court may need to intervene to determine how the account should be managed or divided. Consult an attorney if you are in this situation.
Does a POA need to tell the other joint owner about account activity?
No. A POA's duty is to the account owner, not to the other joint owner. However, if the account owner wants the other owner informed, the POA should follow that instruction. And if the account owner is incapacitated, the POA may need to provide accounting to the court or to family members, depending on state law.