A power of attorney is a legal document. This document permits the person that creates it to appoint a trustworthy individual to act on their behalf. The person that creates the document is the principal while the appointee is the power of attorney agent. Now, questions arise about the validity of the power of attorney after the death of the principal. That’s what this article is about. We’ll also treat the case of abuse of the power of attorney, if any, after the death of the principal.
Validity Of Power Of Attorney After Death
The power of attorney becomes invalid after death.
Most individuals assume that a person with a power of attorney retains the authority to administer an estate after a loved one dies. That is not correct. The power of attorney does not survive the death of the principal.
A power of attorney is a legal document that empowers one person to act on behalf of another person. Powers of attorney come in a variety of forms and can be tailored to the needs of the persons involved. A person, for example, can appoint a power of attorney to assist them in entering into contracts, dealing with real estate and personal property, handling financial and tax issues, and arranging for housing and health care.
A power of attorney typically becomes null and void when the “principal” becomes incompetent. A durable power of attorney, on the other hand, can remain in effect after incapacity. It also expires upon the principal’s death or until the document is canceled.
Is Power of Attorney Transferable After Death?
Perhaps your parents died recently and you were designated as their agent in a power of attorney (POA). You’re the one they wanted to handle specific personal business affairs for them. The POA empowered you to act on their behalf in a variety of financial situations. These include buying or selling a property on their behalf or just paying their payments.
You might assume you should keep paying their bills and settling their accounts after their death. But then, you shouldn’t and can’t—at least not until you’ve also been chosen executor of their estate in their will, or the court appoints you as the administrator of their estate if they didn’t leave a will.
Who Has The Power Of Attorney When there Is A Will?
People can no longer legally own property after they die. Therefore, probate is required to transfer their estate to surviving heirs. If your parents had a bank account or other property in their sole name, their will must be submitted to the probate court soon after their death.
This initiates the probate process, which will lawfully divide their assets to their living beneficiaries. The executor named in their will is in charge of steering the estate through the probate procedure.
Who Has Power Of Attorney When There IS No Will?
Even if the deceased did not make a will, their property must still go through probate to transfer ownership. The main difference is that their property will be distributed according to state law rather than their intentions as expressed in a will.
If the dead did not leave a will, the court will appoint an administrator to settle the estate. You can ask the court to appoint you as administrator if the dead had no surviving spouse or if their surviving spouse and their other children agree that you should handle the job.
What Does Someone With Power of Attorney Do After a Death?
The power of attorney you have for your parent is meaningless after their death. Because they can’t lawfully possess money or property, the deceased individual no longer owns anything for you to handle.
The POA may empower you to conduct financial transactions on their behalf. However, they technically no longer own the property or money over which you have authority. Because it is owned by their estate, only the executor or administrator of their estate can deal with it during the probate procedure.
In practice, when most financial institutions learn of a deceased person’s death, their accounts are instantly frozen. The freeze will stay in effect until they are notified by the estate’s executor or an administrator. If you tried to utilize the POA, it would be disallowed.
Some minor estates do not require probate. Conversely, your father may have utilized a living trust as an estate-planning tool rather than a will and testament, in which case probate is not necessary. If the deceased left a revocable living trust, a replacement trustee would take over after their death. However, these exceptions are limited.
In any scenario, the POA becomes null and void.
Survivorship Rights and Power of Attorney
It can also make a difference if your parents’ bank account or other property is not included in their probate estate for whatever reason. Probate is only required for assets that your parent holds solely in their name. To transfer these assets to living beneficiaries, a legal process is required.
However, if your parent named you as a co-owner of their bank account or even on the deed to their home, granting you “rights of survivorship,” the account or property goes to you automatically and promptly upon their death. These assets would not require probate.
You would keep custody of these assets. However, you would no longer be obligated to pay your parents’ debts with that money because probate also handles their final payments. You would be obligated to repay any obligations you co-signed with the deceased, just as you were during their lives.
Power of Attorney vs. Estate Executor Agent
In either situation, the probate court will appoint an individual to serve on a deceased person’s estate. This individual may or may not also be the agent under the power of attorney. The event of death separates the two responsibilities. However, in some situations, the agent specified in the POA may also be named as executor or administrator of the estate.
If you are also named as the executor or administrator, you will have control over the deceased’s bank accounts and other assets until ownership can be transferred to surviving individuals.
If you have power of attorney over someone and are concerned about what will happen to their estate upon their death, you should consult with an estate planning attorney who can help you properly plan for this transition.
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Power Of Attorney Abuse Found After Death
Beneficiaries frequently report after learning of activities done by the person handling the deceased’s affairs under a power of attorney that has reduced the value of the deceased’s inheritance. Some of the deceased’s assets may have been transferred into the attorney’s name or into the names of others. The attorney may have used the deceased’s money or property for personal gain. This has occurred without the beneficiaries’ awareness. And it only becomes apparent after the deceased’s death. At this time, the deceased’s inheritance is significantly smaller than expected or is missing critical assets.
There is frequently a further complicating factor: the attorney under suspicion may also be the executor of the estate. An executor is responsible for overseeing estate property and filing appropriate claims against any third parties in possession of estate property. If the executor was also the attorney, the executor would have to investigate their own conduct as an attorney. This is clearly a conflict of interest.
Even though the executor is not the attorney, the executor may decline to prosecute the attorney. The executor may believe that the claim against the attorney is without merit, or that the cost of pursuing the claim is excessive or an unwarranted risk.
What Does The Beneficiary Do After Learning of Abuse Of Power Of Attorney After The Death Of The Principal?
A beneficiary attempted to overcome this difficulty once. He contended that an attorney of a now-deceased individual had fiduciary duties to the beneficiaries of that individual’s estate. As a result, it was contended that the beneficiary had the standing to sue the attorney on her own behalf. The court was not convinced. An attorney is only required to account to the donor who granted the power of attorney while the donor was still alive. When the donor dies, the attorney is solely required to account for the donor’s estate. A beneficiary lacks standing to sue the deceased’s attorney for breach of fiduciary duty or to seek a declaration of resultant trust in favor of the estate. The court also refused to agree to an exception to an executor’s sole statutory authority to initiate proceedings on behalf of an estate when the would-be defendant is the personal representative.
As a result, a beneficiary who feels the estate has a claim against its executor cannot simply bring that claim as a beneficiary. However, there are alternatives. If the executor is in a conflict of interest or refuses to take appropriate steps to pursue proper claims to recover estate assets, a beneficiary may seek the executor’s removal and replacement.
How to Obtain Power of Attorney After Death
Unfortunately, after someone has died, you cannot obtain power of attorney and act on their behalf.
A power of attorney must be executed while the principal is alive and of sound mind and acting of their own free will, according to the law.
Is a power of attorney terminated with death?
When the principal dies, the power of attorney becomes null and void. As a result, utilizing your authority as the power of attorney after their death is illegal.
If your mother named you as her agent while she was still alive, you may have been legally authorized to pay her bills, manage her finances, file her taxes, sell her real estate properties, and more. However, after she dies, those abilities are no longer legally valid.
You can only continue to manage her affairs if you were also named executor of her estate in her will, or if a court designated you estate administrator.
If you suspect an agent is abusing their power of attorney, find out who has the authority to override the power of attorney.
Is a Durable Power of Attorney Valid after Death?
Well, a durable power of attorney also expires upon the death of the principal.
A durable power of attorney permits the agent to continue operating on the principal’s behalf. This is even if the principal becomes mentally incompetent and unable to communicate, but it only lasts until the principal dies.
A conventional power of attorney, on the other hand, expires when the principal becomes mentally incapable or dies.
As power of attorney, you are legally entitled to manage the principal’s affairs for the duration of their life. If the principal wishes to keep control over their property after death, they must appoint you executor in their will. Otherwise, your appointment will be terminated.
Frequently Asked Questions
What rights does someone with power of attorney have after a death?
Even if you held power of attorney for someone while they were alive, your rights following their death are limited to what they specified in their will. If you disagree with the executor’s decisions about their estate, you may have standing to dispute them in court.
Is durable financial powefr of attorney still valid after a death?
A durable power of attorney is valid as long as the person you are authorized to represent is alive but incapable.