Power of attorney after death gives a person the authority to act on behalf of the deceased, also known as the principal, to execute their wishes after they pass. This differs from a power of attorney, which is only valid when a person is permanently incapacitated in some way, but is otherwise still living.
The death of a loved one is one of the most difficult things you can go through. Amid all of the grief and emotion, it is crucial to consider the wishes and assets of the deceased. The easiest way to do this is to follow what is outlined in the deceased’s will. However, even if the deceased previously appointed a power of attorney to manage their affairs while alive, this power is no longer valid after the deceased passes.
If there is not a proper plan in place at the time of death, the legal situation can get complicated and difficult to sort out. There’s even the possibility that certain assets will be left in the wrong hands. In this article, we outline what a power of attorney after death is and how it can help you execute the wishes of the deceased according to their best interests.
What is a power of attorney?
A power of attorney is a form of written authorization to represent or act on another’s behalf in private affairs, business, or some other legal matter. It gives a designated person, also known as an agent, the power to act for another, allowing the agent to make decisions about the property, finances, or medical care of the principal.
The person designated as the power of attorney agent does not necessarily have to be a lawyer, though this might be beneficial. The power of attorney is most commonly used in the event of permanent incapacitation. The person authorized to act as the power of attorney agent, while the incapacitated person is still living, does not necessarily continue having these authorizations after the person dies.
Power of attorney after death
When handling property after the death of a loved one, all matters will pass through probate court, as people can no longer legally own property once they’re deceased. Who handles the probate estate differs depending on whether the principal left a will.
When a will is in place
The executor named in the principal’s will is responsible for beginning the probate process by legally distributing the property to living beneficiaries.
The executor must also guide the deceased’s will through the entire probate process. It is important to note that the executor of the will and the power of attorney agent are not always the same, as the designation of the agent becomes invalid after the principal dies.
When there is no will
The main difference here is that if the principal didn’t leave a will, their property will typically pass through probate court according to state law.
The court will appoint an administrator to settle the deceased person’s estate. Often, this will be a family member or someone the family chooses. However, in cases, when there are creditors, the court will probably appoint an independent third party as the personal representative or executor instead of a family member.
How to get power of estate after death
The easiest way to obtain power of estate after a death is to be named the executor of the estate in the principal’s will. This way, during the probate process, there is an irrevocable legal document that binds you as the estate administrator. As the personal representative of the principal, you will go to court to formally be appointed as the estate handler.
If there is no will, the probate process becomes more complicated. The court will name a personal representative, who may not always be the person best suited for the job, or someone associated with the family of the principal. It is up to the court to appoint whomever they deem to have the principal’s best interests in mind when settling the principal’s affairs.
Power of attorney agent and estate executor
These two roles are divided in the event of death. The estate executor is granted their authority by the probate court and might not be the same person who was given power of attorney by the principal before they passed away.
There are certain cases, however, where the power of attorney agent and estate executor are the same person. When this happens, that person is still allowed authority over the deceased’s assets.
Power of attorney and rights of survivorship
If you are listed as a “co-owner” on a bank account or another asset of the deceased, you may earn what’s known as rights of survivorship. Most commonly, this is the surviving spouse or other loved one of the deceased. For example, if you are listed as the co-owner on your parent’s bank account, you would receive rights of survivorship, and the asset would automatically get passed on to you as the co-owner.
Assets given as rights of survivorship do not need to pass through the courts or a probate process. Probate is only necessary for assets for which the deceased is listed as the sole owner.
Is irrevocable power of attorney valid after death?
The short answer is: no. The irrevocable power of attorney is not valid after death. If the person didn’t leave a will and they die, you must have been named the executor of the estate in the will or appointed the administrator of their estate. Only the executor can continue to act as the personal representative on behalf of the deceased.
For example, most financial institutions will immediately freeze the bank accounts of the deceased once they receive notice of their passing. This freeze will remain active until contacted by the executor or administrator. In an instance like this, if you attempt to utilize authority as the power of attorney, your access to these assets would be rejected.
Does this differ from a durable power of attorney?
Though there are several key differences between these classifications, both durable and irrevocable powers of attorney expire after the principal’s death.
An irrevocable power of attorney is more common in business dealings, where the principal gives up their ability to revoke or change the designated individual. This differs from a durable power of attorney, who typically controls the principal’s finances even after the principal becomes incapacitated.
Are there any exceptions to this rule?
There are instances, such as in the case of small estates, that do not require matriculation through the probate process. This is a scenario where, if the principal had created a revocable living trust while they were still alive and named you as a successor trustee, you’d be able to execute the wishes of the revocable living trust without having to go through any sort of court.
While this doesn’t change the fact that the power of attorney expires after the principal dies, it does do away with the tedious and expensive process of going through the court.
- Just because a person had a power of attorney when someone was alive does not mean that they retain that power once the person dies. The only person who can continue to act in that role is the executor of the deceased’s will.
- If the deceased didn’t leave a will, their property will pass through the probate process according to state law, rather than according to their wishes. A court will appoint someone to ensure that the property is taken care of on the principal’s behalf.
- The power of attorney agent and estate executor are two different roles, though the same individual may serve in both positions. When this happens, that agent is still allowed to keep their authority over the assets of the principal.
- If you are listed as a “co-owner” on a bank account or other asset of the principal, you are granted rights of survivorship. This means that the asset is automatically transferred to you upon the principal’s death and is not subject to the probate process.
View Article Sources
- Debts and Deceased Relatives — Federal Trade Commission
- Discharge Due to Death — Federal Student Aid
- If There’s No Will, Who’s the Executor? — Nolo.com
- How To Negotiate A Debt Settlement – Pros and Cons — SuperMoney
- Best Debt Relief Companies | April 2022 — SuperMoney
- How Does a Reverse Mortgage Work When You Die? — SuperMoney
- What Should You Do if You Can’t Afford a Funeral? — SuperMoney
- Contingent Beneficiary vs. Primary Beneficiary: Definitions and Examples — SuperMoney
- Life Insurance Facts Companies Don’t Want You to Know — SuperMoney