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Don't worry about "turning your sister in" - she has proven that she cannot be trusted. By doing this behind your back she has demonstrated that she has no respect or trust for you or your father. If she wished to sustain your sibling relationship beyond your fathers death, her actions indicate otherwise. If you had your Dad's POA before this then it's up to you to fight on his behalf - and do it QUICKLY before she spends too much and it can't be recovered. Being a POA is not easy, it means saying the difficult things and making difficult decisions. It also means that your sister might be really angry so be prepared and know that you're in the right to fulfill your fathers long term intent. There's a reason he didn't give her POA long ago - she's lived up to his expectations - or DOWN to them.
My own situation is a bit different for 7 years ago my mother made me joint owner of all of her accounts in one bank in our state and before her mind got real weak made me joint owner with the right of survivor ship of all her securities. After months of looking, I've found her will and see that I'm executor of the estate and sole inheritor of all she owns, has been given, and inherited. When I took the POA to the bank, their response was you are already co-owner of the accounts, but she is the primary owner. Now, I did have to submit my POA to be copied at another bank where she and my step-dad have a joint account. My POA has helped me gather information on past years that we did not have in order to complete taxes. This including accessing information on a dead account.
When I was made my mother's power of attorney, I had to take a copy of the power of attorney to the bank, after they verified that it was valid, they still had to have papers for my mother to sign and she had to be present to sign them. She was ill which meant that we had to take her on a good day to the bank and they had to see that she was in the car in order for them to accept the signature, and she had to have her id with her. Also, many places want a power of attorney to be filed/recorded at your county courthouse in order to be official.
The very first thing that you need to do is to speak to the bank manager and find out what their procedure for adding someone to an account is in order to find out what your family members are guilty of.
There is a snow ball's chance that your parent just does not want to admit that they made a decision in haste that they regret now. When my Mother got older she began to be manipulative and play my brother and I against each other and to do things like tell my children that I didn't love them as much as she did, in order to force me to do things I hadn't knuckled under about. Basically, the type of thing a child does, only with the intelligence and life experience of an adult.
But barring that, the bank manager may be able to help you decide where to turn from here. Legal action is probable. You have to make hard decisions sometimes, and in this case you have to decide who needs to be protected, your siblings or your parents. You will probably not get the luxury of picking both.
I would also take his will to an estate atty and explain what is going on. This type of thing does go on in families and must not just let it take place because they are family. Sister or not, she's taken advantage of and abused your dad's trust.