The power of attorney becomes invalid after the death of the principal, but the law provides other options.
Does the power of attorney continue after death?
Your parent may have recently passed away, and you were designated as their agent in the power of attorney. You are the person they want to handle some personal matters for them. The power of attorney granted you the authority to act on their behalf in many financial matters, such as buying or selling real estate for them or perhaps just paying their bills.
You might think you should continue paying those bills and settling their accounts after their death, but you should not do that and you cannot do that – at least unless you have also been appointed as the executor of their estate in their will, or the court appoints you as the administrator of their estate if they did not leave a will.
Who holds the power of attorney when there is a will?
People cannot legally own property after their death, so transferring their property to living heirs requires legal probate proceedings. Your parents’ will should be submitted to the probate court shortly after their death if they owned a bank account or any other property solely in their name.
This step initiates the probate process to legally distribute their property to the living beneficiaries. The executor named in their will is responsible for this and will manage the property through the probate process.
Who holds the power of attorney when there is no will?
The decedent’s estate still must go through probate to effect the transfer of ownership, even if they did not leave a will. The main difference is that their property will be distributed according to state law rather than according to their wishes outlined in the will.
The court will appoint an administrator to settle the estate if the decedent left no will. You can petition the court to appoint you as the administrator, and the court is likely to grant it if the decedent did not leave a surviving spouse, or if their surviving spouse and other children agree that you should perform this duty.
Executor vs. Power of Attorney Agent
In either case, whether there is a will or not, the probate court will grant authority to act on behalf of the deceased person’s estate to a person who may or may not also be the agent under the power of attorney. The roles are separated by the death of the individual. In some cases, the agent in the power of attorney may also be appointed as the executor or administrator of the estate.
Note: You will still have authority over the decedent’s bank accounts and other assets if you are also appointed as the executor or administrator, at least until ownership is transferred to the living persons.
What does someone with a power of attorney do after death?
The power of attorney you hold for your parents does not serve any purpose after their death. The deceased no longer owns anything you need to handle on their behalf because they cannot legally hold money or property.
Your power of attorney may have authorized you to conduct financial transactions on their behalf, but they no longer legally own the property or money that the power of attorney placed you in charge of. The property reverts to their estate, so the executor or administrator of their estate handles it during the probate process.
Note: Practically, most financial institutions immediately freeze the accounts of deceased individuals as soon as they learn of their death. The freeze remains in place until they are contacted by the executor or administrator of the estate. If you attempt to use the power of attorney, it will be refused.
Some very small estates do not require probate, or your parent may have used a living trust as a method of estate planning rather than a last will, so probate may not be necessary. An alternate trustee will take responsibility after the decedent’s death if they left a revocable living trust, but these exceptions are limited.
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Any condition, the power of attorney agency becomes invalid in both cases.
Power of Attorney and Rights of Survivorship
The situation may also change if your parent’s bank account or any other assets are not included in their probate for some reason. Probate is only necessary for the assets that your parent exclusively owns. These assets require a legal process to transfer them to the living beneficiaries.
But if your parent has registered your name as a co-owner on their bank account or even in the deed of their home, granting you “rights of survivorship,” then the account or property will automatically and directly transfer to you upon their death. There will be no need for probate concerning these assets.
You will retain control over these assets, but you will no longer be responsible for paying your parent’s debts from that money as probate also handles their final bills. You will be responsible for paying the debts that you co-signed with the deceased person, just as you were during their lifetime.
Frequently Asked Questions (FAQs)
Is a durable financial power of attorney valid after death?
Both durable and non-durable financial powers of attorney terminate upon the death of the principal. However, a durable financial power of attorney remains effective if the person you were appointed to represent is still alive but has become unable to do so. For example, a parent with dementia can appoint a durable financial power of attorney to an adult child.
What rights does someone with a power of attorney have after death?
Even if you had power of attorney for someone during their lifetime, your rights after their death extend only to what is specified in their will. If you disagree with the decisions made by the executor regarding their estate, you may have the right to challenge them in court.
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Sources:
Legal Assistance for Military Personnel. “Powers of Attorney.”
Internal Revenue Service. “Deceased Taxpayers – Understanding the General Duties as an Estate Administrator.”
South Carolina Legislature. “Title 62 – South Carolina Probate Code.”
Wayne County Probate and Juvenile Court. “Full Administration With and Without a Will.”
Michigan Legal Help. “An Overview of Informal Probate.”
Cornetet, Meyer, Rush and Stapleton Attorneys at Law. “Probate Q & A.”
California Courts. “Simplified Procedures to Transfer an Estate.”
AARP. “10 Things You Should Know About Living Trusts.”
Florida Bar. “Consumer Pamphlet: Probate in Florida.”
Cornell Law School Legal Information Institute. “Right of Survivorship.”
Source: https://www.thebalancemoney.com/power-of-attorney-duties-3974714
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