Jan142026
Guardianship Q&A Series

If we already have power of attorney, what can we do when a third party has already withdrawn the money? – North Carolina

Short Answer

In North Carolina, having a power of attorney (POA) lets an agent act for an incapacitated adult, but it does not automatically reverse a withdrawal that already happened. The practical next steps are usually (1) lock down access going forward, (2) gather records to identify who withdrew the funds and how, and (3) pursue recovery through the bank’s fraud process, law enforcement/DSS reporting, and—when needed—court action (often alongside an interim or full guardianship for stronger court-supervised control).

Understanding the Problem

When a North Carolina adult is mentally incapacitated and hospitalized, a family member or other trusted person may already hold a financial power of attorney and need to know what can be done after someone else has already taken money from the adult’s account. The decision point is whether the existing POA authority is enough to (a) stop further losses and (b) take steps to recover funds that a third party already withdrew, especially when the adult now needs round-the-clock care and rehabilitation services.

Apply the Law

Under North Carolina law, a POA generally gives an agent authority to act for the principal (the incapacitated adult) within the scope of the document. That authority can be used to request account information, dispute transactions, and change access going forward. But recovery of money already withdrawn often depends on how the withdrawal happened (for example, debit card, checks, online transfers, joint account access, or another POA) and may require involvement from the financial institution, Adult Protective Services, law enforcement, or the Clerk of Superior Court through a guardianship proceeding.

Key Requirements

  • Valid authority and scope: The POA must be valid and broad enough to cover banking and financial actions (and the agent must be acting within the document’s limits).
  • Proof and records: Recovery efforts usually turn on documentation—account statements, transaction details, signature cards, online access logs (when available), and any documents the third party used to gain access.
  • Right forum for the problem: Banks handle fraud/dispute processes; Adult Protective Services and law enforcement handle suspected exploitation; and the Clerk of Superior Court handles guardianship and related protective orders for an incompetent adult’s person and estate.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, the adult is hospitalized and mentally incapacitated and now needs 24/7 care and rehabilitation. A POA agent can use the POA to request records, communicate with the bank, and take steps to prevent additional withdrawals. But if a third party already withdrew money, the agent typically must document the transactions and then pursue the appropriate channel (bank dispute/fraud, exploitation reporting, and possibly court action), and may need an interim guardianship if there is an immediate risk to the adult’s estate or care plan.

Process & Timing

  1. Who acts: The POA agent (and, if needed, a petitioner for guardianship). Where: the financial institution first; and if court intervention is needed, the Clerk of Superior Court in the county with proper guardianship venue. What: provide the POA, request a full transaction history, and request the bank’s fraud/dispute packet and any required affidavits.
  2. Stabilize the account: Ask the bank about freezing online access, changing passwords/PINs, removing unauthorized users, stopping checks, and placing alerts. If the third party had legitimate access (for example, as a joint owner or authorized signer), ask what documentation exists and what changes are allowed under bank policy.
  3. Escalate when risk is ongoing: If there is an imminent risk of further loss or the adult’s care cannot be arranged because funds are disappearing, consider filing for an interim guardian so a court order can quickly authorize limited, immediate financial protection while the full incompetency/guardianship case proceeds.

Exceptions & Pitfalls

  • How the third party accessed the money matters: A bank may treat a debit card transaction, forged check, ACH transfer, or joint-account withdrawal very differently. The recovery path changes depending on the access method.
  • A POA does not automatically override other access: If the third party is a joint account holder or is listed on the account in another way, the bank may not be able to “undo” withdrawals without a court order or a finding of wrongdoing.
  • Bank “discharge” rules can limit claims against the bank: Some North Carolina statutes allow certain institutions to treat payments made before notice as a discharge of the bank’s obligation, which can shift the focus to pursuing the person who took the money rather than the bank.
  • Guardianship may be necessary even with a POA: If the POA is being challenged, the bank refuses to act, or the situation requires court-supervised control of the adult’s estate to stop exploitation, guardianship (including interim guardianship) can be the more effective tool.
  • Reporting can protect the adult and create a record: North Carolina law requires financial institutions to report suspected exploitation of a disabled adult to law enforcement and county DSS, which can help trigger protective involvement and preserve evidence.

Related reading: stop someone from accessing an incapacitated relative’s bank accounts and what to do if a bank refuses to honor a power of attorney.

Conclusion

In North Carolina, a power of attorney helps an agent act quickly to protect an incapacitated adult’s finances, but it does not automatically recover money a third party already withdrew. The next step is to gather bank records, dispute the transactions through the financial institution, and escalate to reporting and court protection when ongoing risk exists. If there is an imminent risk to the adult’s estate or care plan, file a motion for an interim guardian with the Clerk of Superior Court to get immediate, limited authority to protect assets.

Talk to a Guardianship Attorney

If a hospitalized, incapacitated adult needs round-the-clock care and money has already been withdrawn, a fast plan can matter. Our firm has experienced attorneys who can help clarify options, coordinate with the bank, and evaluate whether interim guardianship is appropriate. Call us today at (919) 341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.

Category: Guardianship Q&A Series

Author: Pierce Law

Pierce Law Group is a North Carolina law firm focused on probate administration, real estate partition matters, and surplus funds claims across North Carolina. We know these situations often come with stress, family dynamics, and time-sensitive decisions—so we prioritize clear communication, steady guidance, and a practical plan from day one. Our goal is to make a complicated process feel manageable, while protecting what matters most to you.