Power of Attorney After Death: All You Need to Know

Does power of attorney end at death? The answer is: Yes, a POA becomes invalid upon the demise of the principal, indicating that the agent can no longer act on their behalf.

In the aftermath of a principal’s death, identifying who is authorized to act on behalf of the deceased becomes a primary concern for the bereaved family. Steps must be taken to ensure a clear transition and prevent any misuse of authority by the agent.

This article outlines the legal considerations and implications following the death of someone with a power of attorney, ensuring clarity and legal compliance in these complex scenarios.

What Happens to a Power of Attorney After Death?

When a principal passes away, the legal authority conferred by a power of attorney ceases immediately. This is true for all types of powers of attorney, including medical, financial, durable, and springing power of attorney.

Any action taken by the agent after the principal’s death is unauthorized. As the agent has a legal obligation to act in the principal’s best interest, misuse of the POA after the principal’s death — such as transferring assets unlawfully — can lead to criminal charges and civil penalties.

Who Is Authorized to Act on Behalf of the Deceased?

With a Will

When the principal has left a will — a legal document outlining their wishes for how property and affairs are to be handled when they pass away — the process of determining who is authorized to act on behalf of the deceased is more straightforward:

• Executor Appointment: The executor is named directly in the will. This individual is legally responsible for managing the estate through the probate process and ensuring that the deceased’s wishes are followed.
• Probate Process: The will must be filed with the probate court. The executor appointed by the will might need to file a petition with the relevant probate court to be officially confirmed as the executor.
• Legal Authority: Once appointed by the court, the executor has the authority to make decisions on behalf of the estate. This includes paying debts, selling property, and distributing assets to the beneficiaries as specified in the will.

Without a Will

In cases where the principal did not leave a will, the court appoints someone to manage the estate:

• State Intestacy Laws: The distribution of the deceased’s property is governed by state intestacy laws, which typically favor spouses, children, and other close relatives in a predefined order.
• Administrator Appointment: The court appoints an administrator (also called a personal representative), generally the next of kin, to handle the estate. This person takes on a role similar to an executor, but without prior designation by the deceased.
• Duties of the Administrator: The administrator is responsible for gathering and valuing the estate’s assets, paying debts and taxes, and distributing the remaining assets according to state law.

With or without a will, it is crucial for the designated executor or administrator to understand their fiduciary duty to adhere strictly to legal guidelines and the principal’s wishes (if known).

Steps to Take Following the Death of a Principal

Following the death of a principal, several critical steps must be taken to ensure that their affairs are managed correctly and legally. Here are the essential actions to guide the family or executors:

Step 1: Notify Relevant Parties

How to notify the principal’s agent and other relevant parties about the principal’s death may depend on the relationship with the recipient. If the principal has designated an executor in their last will and testament, this executor can assist in the notification process.

For agents who are personal friends or family members of the principal, a written letter or email is typically suitable. In the case of professional agents, a written letter is also advisable, and they may additionally request supporting documents like a death certificate.

A death certificate is necessary to verify the death and facilitate various procedural steps legally. Obtaining at least 10 copies is advisable, as many institutions require an original certified copy.

Provide copies to banks, the probate court, insurance companies, and other financial institutions to process the estate and release funds. You may also attach an affidavit of death with the certificate. Notify all relevant parties immediately to prevent the agent from abusing their authority.

Step 2: Initiate the Probate Process

Regardless of whether a will exists, the probate process is necessary to transfer the deceased’s property to the living heirs (unless the estate value is below the state’s probate threshold). This legal procedure ensures that all assets are accounted for, debts are paid, and rightful heirs receive their inheritance under the court’s supervision.

If the principal did not leave a will, their property would be distributed according to state intestacy laws — which might not align with the deceased’s wishes.

Step 3: Manage Accounts

The principal’s bank accounts, investment accounts, insurance policies, and credit cards will become inaccessible immediately upon notification of the principal’s death. Even with authority granted from a financial power of attorney, the agent can no longer perform financial transactions in the principal’s bank accounts or manage the principal’s financial affairs.

Cars, boats, or other vehicles cannot be legally sold or transferred without going through the proper estate settlement process.

Funds remain frozen except for funeral expenses until the probate process is over and the executor is granted relevant authority for estate administration.

Step 4: Handling of Documents and Further Actions

A properly drafted power of attorney might allow the agent to access essential documents such as tax records and Social Security information, which are vital for settling the deceased’s affairs. However, this access ends immediately upon the principal’s death. No family member will be able to access these documents until authorization from the probate court is granted.

Conclusion

Understanding the implications of a power of attorney after the principal’s death is essential for managing estate affairs legally and effectively.

A POA terminates immediately upon the principal’s death, ceasing the agent’s authority. It is crucial for the bereaved family to quickly identify the legally appointed executor or administrator to handle the deceased’s estate to avoid any unauthorized actions by the former agent.