- There are many types of power of attorney
- A power of attorney is no longer valid after death
- Accessing assets after a loved one passes depends on several factors
Signing a power of attorney (POA) gives you the legal authority to manage the principal’s affairs. This authority does not generally extend past the death of the principal, though there may be an exception if your loved one named you as executor in their estate planning document.
A power of attorney after death ceases to be effective. You can no longer legally act on behalf of the principal after they pass, although someone still needs to manage the decedent’s affairs or estate.
If a loved one named you their power of attorney before their demise, it means they trusted you to handle and oversee their affairs. They also found you trustworthy enough to perform their essential functions while still alive.
Another exception is if you have to undergo probate and have been named the estate administrator in case your loved one passed on without a will. This guide will explain how a power of attorney works and will answer the question, “Does power of attorney end at death?”
Defining Power of Attorney
A power of attorney is a legal document allowing the person creating it (the principal) to appoint a trusted individual to act on their behalf. The appointee is known as the agent, and they gain the authority to cash checks, sign contracts, pay bills, and manage the principal’s investments. An agent must understand their duties and roles as a power of attorney. Many people don’t fully understand how a POA works, yet this is crucial in helping them know what happens to power of attorney after death.
Types of Power of Attorney
There are a variety of power of attorney types available depending on the needs of the principal. Powers of attorney fall into five distinct categories:
1. Durable and Nondurable Power of Attorney
The agent in a durable power of attorney continues to act on behalf of the principal if the latter becomes incapacitated. A nondurable power of attorney means the agent’s authority ends if the principal becomes incapacitated. This last type isn’t ideal for estate planning.
2. Springing POA
A springing power of attorney gives the agent authority to act only when a specified condition is met; for example, they can only work on the principal’s behalf if the principal becomes incapacitated. The springing POA generally has no legal authority.
3. General Power of Attorney
The general POA authorizes the agent to act on behalf of the principal in all situations allowed by local law. The principal can still handle some affairs on their own.
4. Financial POA
A financial power of attorney is unique in that it allows the agent to make decisions about the principal’s money and property, such as paying bills, filing taxes, or collecting and managing retirement benefits.
5. A Medical Power of Attorney
Medical POA is a limited type of authority allowing the agent to make decisions for medical care, including treatment, surgery, medication, end-of-life care, and choice of healthcare providers.
It’s paramount that the assets are protected following the expiration of a power of attorney after death. This period can be marked by chaos, but the following sections explain what typically happens.
Navigating the Aftermath: The Survivor’s Checklist
After the death of a loved one, it’s crucial to have a clear plan for managing their estate and final affairs. To assist in this process, we recommend referring to The Survivor’s Checklist. This comprehensive guide provides a step-by-step approach to handling the myriad tasks that arise after a loved one’s passing, ensuring nothing is overlooked during this challenging time.
What Happens to The Power of Attorney After Death if Your Loved One Left a Will?
Your loved one can no longer own property after death, and you can’t act on their behalf when they’re gone. Probate becomes necessary to transfer the assets they leave behind to their living heirs. The will they left behind must be filed with the probate court shortly after their death, especially if they solely held a bank account or other properties.
Filing the will with probate officially begins the process of distributing the property to the living beneficiaries. The executor named in the will has the authority to oversee the probate process.
Does Power of Attorney End at Death if There’s No Will?
Your loved one’s property must also undergo the probate process to complete the transfer of ownership unless a will is in place. The difference is that the distribution will be according to state law rather than the decedent’s wishes. The court will appoint an administrator to settle the estate, and you can apply to the court to be designated as the administrator.
Your request is likely to be granted if the decedent leaves no surviving spouse or if the surviving spouse and children, who are most likely the beneficiaries, agree to have you as the administrator over the estate. If the beneficiaries disagree with your decisions as the executor regarding the estate, they may challenge you in court.
What Is Abuse of Power of Attorney After Death?
A POA expires automatically upon the death of the principal. As the agent, you must immediately stop acting on behalf of the principal upon their demise. Continuing to act as agent may be considered abuse of power of attorney, which can happen before or after death and is a potential crime in either case.
An agent can misuse their authority, for example, to unlawfully move assets from the principal’s name to their own. Such a situation is known as inheritance hijacking.
Other beneficiaries may not realize inheritance hijacking has taken place until after the principal passes and they discover assets missing from the estate. Heirs can report disputes regarding the misappropriation of assets in probate courts.
Legal Remedies for Abuse of Power of Attorney After Death
An agent has a legal obligation to be loyal and trustworthy. They might be considered to have committed crimes like embezzlement, fraud, and theft if they altered the decedent’s estate for their benefit. Suspected criminal acts can make the district attorney pursue criminal charges against an agent who steals from an estate.
An heir or beneficiary to a decedent may file a civil petition to have the misappropriated assets returned to the estate. Some civil law repercussions for misappropriation of assets include stiff fines and jail sentences for inheritance hijacking.
Bogart Wealth Has Qualified Attorneys to Help You with Estate Planning
The issues around a POA can be complex, primarily if abuse of power of attorney arises after the principal’s death. Comprehensive estate planning can stop the issues that come with a PO before they start.
Bogart Wealth offers unparalleled estate planning services to help guide you and your loved ones to the best plan for your future. Contact Bogart Wealth to speak with an expert today.