A power of attorney (POA) lets the principal take control of their affairs and assign decision-making authority during their lifetime. But is a POA valid after death? Read on to learn what happens to a POA when a family member passes away and how to manage their affairs.
What Happens to a Power of Attorney (POA) After Death?
A power of attorney becomes ineffective when the principal dies. It’s no longer valid and does not continue after death, regardless of the type of POA the principal has implemented.
For example, imagine that a family member implemented a durable power of attorney during their lifetime. If they appointed you as the agent, you would be allowed to act while they’re alive and through their incapacity. However, once they die, your power as the agent ends.
All powers of attorney, including limited, non-durable, medical, real estate, vehicle, and springing POAs, end at the principal’s death.
Once the principal dies, the agent cannot complete any action on the principal’s behalf. An agent under a POA cannot close a bank account after death. They are also prohibited from completing these actions, even if the POA granted them permission:
- Cashing or writing checks
- Withdrawing money
- Changing beneficiaries on life insurance
Is an Agent Responsible for Medical Bills After the Principal's Death?
In most cases, an agent is not responsible for paying medical bills after the principal’s death. The principal’s estate must cover debts, including medical bills.
The agent is only personally liable for debts if they had a separate legal obligation. For example, if the agent co-signed a debt, they may be responsible.
What If an Attorney-in-Fact Acts After the Principal’s Death?
Under common law, any act that an agent completes on behalf of a deceased principal is null and void. If the agent continues to act while knowing that the principal has died, they may encounter legal penalties for abuse of power. Depending on the severity of the abuse, they may face charges of fraud or negligence.
If the agent moves assets for their own benefit, they engage in something called inheritance hijacking, which can lead to fines or jail time.
Civil law may protect the agent and uphold their actions if they were unaware of the principal’s death and acted in a bona fide (good faith) manner. The agent may need to complete an affidavit to show that they genuinely did not have knowledge of the principal’s death.
Who Is Authorized to Act on Behalf of the Deceased?
No one has the authority to act under a power of attorney after the principal’s death. Therefore, who has authorization to act on behalf of the deceased depends on whether the principal had a last will in place.
If the principal wrote a last will, the executor gets appointed to carry out the principal’s final wishes and manage their estate under the guidance of the court. Before the executor is allowed to act, the will must go through the probate process.
Can a POA Override a Last Will?
No, a POA cannot override a last will. A POA becomes ineffective when the principal dies. A last will only goes into effect when the principal dies.
If the principal did not write a last will, they died intestate. In this case, their estate still goes through the probate process, but the court determines who is the next of kin by following the state’s laws of intestate succession. Using this information, the court will appoint an administrator to close out the principal’s estate. The administrator must act with fiduciary duty, upholding the interests of the estate and its beneficiaries.
How to Access a Loved One’s Assets After Death
Because a POA doesn’t work after death, it’s important for you and your loved ones to have an estate plan in place and know what to expect.
If you are the executor of the deceased person’s will, you can access their assets and manage them according to the principal’s wishes. If your loved one passes away and has a will, but you’re not the executor, you should locate the executor. Make an effort to provide them with any relevant details you have about the estate.
The executor is responsible for:
- Initiating the probate process
- Completing an inventory of the deceased individual’s estate
- Notifying beneficiaries and creditors
- Distributing assets according to the will
If you don’t know who the executor is or believe they’re not fulfilling their duties, you can contact the probate court handling the estate on how to proceed. Seek additional legal guidance if needed.
If your loved one died without a will, you can petition the probate court to be appointed as the estate administrator. The court gives priority to close relatives. However, if no one with a higher priority objects, the court will likely approve your petition. Once appointed, you’ll have executor-like duties. These duties include:
- Gathering the deceased person’s assets
- Paying outstanding debts
- Distributing the remaining property according to your state’s intestacy laws
Creditors Can Petition to Open the Estate
If no one takes action to open the estate, creditors can ask the court to start the probate process so they can collect money owed to them. When this happens, the court usually appoints a neutral third party to handle the estate. This person will gather the deceased person’s assets, pay valid debts, and distribute the remaining property to the rightful heirs.
You can avoid third-party involvement by ensuring you and your family members have a solid estate plan in place.
Other Ways to Access a Loved One’s Estate
Since a power of attorney becomes null and void once the principal dies, you may want to know about other ways to access a loved one’s estate:
- Joint ownership with right of survivorship: If an asset was owned jointly, the surviving owner automatically becomes sole owner on death.
- Payable-on-Death (POD) or Transfer-on-Death (TOD) designations: Bank accounts, and investment accounts can name a POD or TOD beneficiary who receives the funds directly when the owner dies.
- Beneficiary designations: Life insurance, 401(k)s, IRAs, and annuities pass directly to the named beneficiary.
- Living trust: Assets titled in the name of a trust pass to beneficiaries per the trust document without probate. The trustee manages distributions. A trust can be revocable or irrevocable during the grantor’s lifetime.
