Powers of attorney help us care for our loved ones during periods of incapacity. Many people assume that the document continues to function after death, but unfortunately, that is not the case.
Jump ahead to these sections:
- Is a Power of Attorney Valid After Death?
- Do Durable Powers of Attorney Last After Death?
- What Are the Options for Proceeding After Death?
- Frequently Asked Questions: Power of Attorney After Death
Simply put, the legal authority to act under a power of attorney ends immediately upon death. Some families successfully rely on a power of attorney for years before death, and as a result, it can be shocking the first time it is rejected. However, alternatives exist when it comes to tending your loved one’s estate or wrapping up outstanding matters.
Determining where to start can be the hardest part, but arming yourself with knowledge is the first step toward finding an answer.
Is a Power of Attorney Valid After Death?
Powers of attorney lose all authority upon the person’s death who is subject to the document — also known as the principal. So, even if the document granted financial decision-making and operational authority during the principal’s life, those powers all evaporate upon the principal’s death.
Using a power of attorney issolely intended during life when someone is incapacitated, unable to make decisions for themselves, or take care of themselves. Therefore, think of a power of attorney as a tool to help someone while they are alive.
Upon death, a new process and set of documents can grant authority and to manage the estate of the person who passed away. This all happens during what is called probate, and you can navigate it on your own or with the help of an attorney.
Do Durable Powers of Attorney Last After Death?
Some powers of attorney include a special “durable” designation. Despite the description, this type of power of attorney isn’t sturdy enough to continue after death. Rather, durable powers of attorney can stay in effect even if the principal becomes legally incapacitated. When someone is legally incapacitated, they lose the ability to make, understand, and communicate their decisions.
Some people choose to create a durable power of attorney so that this type of tool can last until their death or until they cancel it, even if they lose legal capacity. In fact, some people choose to set up their power of attorney so that it only takes effect when they reach incapacity. We call those springing powers of attorney because they “spring’” into place when needed rather than always being in place.
It is not uncommon to associate powers of attorney with end-of-life and emergency medical care. That said, it can surprise some people to learn that those appointed under a power of attorney lose the ability to act on behalf of the other when they reach incapacity.
Regardless of whether it is durable, springing, or some other designation, all powers of attorney lose authority upon the death of the person who created it. This is when people turn to the probate process to delegate the needed power.
What Are the Options for Proceeding After Death?
After someone passes away, many scenarios exist for what could happen next. However, those left behind should find themselves in one of the following general categories:
- small estates that fall below state probate requirements
- trusts and other non-probate transfers
- estates with wills
- estate without wills.
Small estates
More money, more problems may as well be the motto of probate courts across the world. Accordingly, those estates worth the least are the easiest to resolve. Many times, people can take care of the last affairs of their loved ones without seeking an appointment from a court, even if their relative failed to engage in any estate planning.
All states allow for a small estate process, although qualifying estate values vary from state to state. For example, some states set relatively low thresholds for small estates at $10,000 as is the case in Georgia. Other states such as Alaska consider anything below $150,000 a small estate.
Regardless of value, estates with real property like homes or land, do not qualify for a small estate process.
Each state establishes its probate and small estate procedures, and many offer a fill-in-the-blank form for you to use. The form, usually called a small estate affidavit, names the person who died and may identify the known assets or heirs. You present the affidavit anywhere you need proof of your authority to act, like at the bank.
Probate estates with wills
As a result, the probate court gets involved with estates with real estate or assets above a state’s small estate threshold, but the court doesn’t intervene and micromanage as you see on TV. The court delegates authority over the estate to someone and tells that person to go forth and take care of everything. That person is called the personal representative or executor.
The decedent names the person they want to oversee their estate in their will. Afterwards, the court confirms that appointment and issues an order making the personal representative’s authority official. During the probate court process, the court then grants a special court order as proof of your ability to work on behalf of the estate. This court order and document is also known as letters testamentary or letters of administration.
People may think the personal representative gets to make the decisions or do whatever they want. While a certain amount of discretion is involved, the personal representative is obligated to follow the decedent’s wishes as set out in the will.
Your loved one may have written their wishes about health decisions in their power of attorney document. It is also expected that they can disclose their desires about distributing their property in their will.
Probate estates without a will
Humans procrastinate, and it can be hard for anyone to make decisions regarding the end-of-life process. These two traits can lead to the all-too-common scenario of someone dying without a will, with loved ones left behind to untangle things.
The probate court appoints a personal representative of the estate to do just that. When a decedent leaves no will, the court instead turns to state law to determine who to appoint. Using a list of priorities based on next of kin for appointment, the court chooses the person highest on the list who is willing to serve.
States all have intestate laws in place to determine the order of inheritance as well. So, while the media can make it seem like the Wild West without a will, there is an orderly priority for distributing assets. Of course, the level of chaos is highly dependent on family dynamics.
Trusts and non-probate transfers
There are also options that people with extensive assets can use to set up their affairs so that probate isn’t even needed. They do this through a collection of designations collectively referred to as non-probate transfers.
Trusts work just as well for estates of all sizes, not just for the ultra-wealthy. When you set up a trust, you create a separate legal entity that can hold property in its own name, e.g., The Irrevocable Living Trust of John Doe.
The trustee of the trust manages those assets for the benefit of the beneficiaries. When someone makes a trust during their life, they can be both the trustee and the beneficiary. Upon their death, a successor trustee takes over. That successor tends to be designated in the trust documents.
Assets in a trust do not count toward the estate value and, as a result, are not subject to probate rules. In the event that things go wrong in the trust administration, beneficiaries can go to court to solve the conflict.
Beyond trusts, a host of non-probate transfer options exist. For example, one of the most accessible ways for people to plan for their estates upon their death is to designate a beneficiary for a specific asset using a legal instrument. Here are a few common examples:
- Name a payable-on-death (POD) beneficiary for all financial accounts, including investment and retirement accounts. This is done through the financial institution itself.
- Hold real property as joint tenants.
- Record a beneficiary deed for real property. The beneficiary deed names the successor owner in the event of the death of the current owner.
Frequently Asked Questions: Power of Attorney After Death
Probate is a big concept and process, so it is normal to have questions. Your local probate court may have forms and location-specific information available online.
Can you get power of attorney for a deceased relative?
As mentioned above, powers of attorney completely stop working upon the death of the person. Institutions may continue to accept the power of attorney because they do not know the principal died, or don’t know the laws surrounding powers of attorney.
Instead, you can become the personal representative through probate court. The court grants you special court order that you can use in lieu of a power of attorney.
If your relative didn’t have real estate or very many valuable assets in general, you might be able to use a small estate affidavit to wrap everything up. Again, the process and cut-off limit vary by state.
Who has the power of attorney after death if there is no will?
Because a power of attorney loses its validity at the death of the person it is for, someone will have to get authority to take care of estate matters. When the decedent didn’t leave a will, the court uses state priority laws to decide who to appoint via a list of next of kin.
When there is no will, surviving spouses are at the top of the list for appointments. After that comes children, and if no children survived, then grandchildren and so on.
When there are no descendants, we turn to ancestors. In other words, if there is nowhere to go down on the family tree, then go up. Parents have next priority, followed by siblings if there are any. When there are no surviving parents, siblings, or descendants of the siblings, then we turn to the grandparent’s generation, and so on.
What can you do if there is an abuse of power of attorney after a death?
Whether the abuse of a power of attorney happens before or after death, it is a potential crime.
If any crime or abuse occurs after the death, then the estate is the victim. Of course, you can report any crime to the police, but the estate’s personal representative is the one responsible for dealing with the aftermath of any crime against the estate. Notifying the personal representative of your concerns can help them swiftly address the issue.
Alternatively, if you have concerns that someone is continuing to use a power of attorney after the principal dies, you can also report it to the probate court where the estate case is opened. There are some cases where family members can end up filing a probate case because something untoward happens, and they need the court’s authority to fix it.
Managing an Estate without a Power of Attorney
Powers of attorney are just one part of an overall estate plan. They fill the critical gap that occurs when someone needs assistance with medical and financial tasks. However, their usefulness ends upon the death of the principal.
Families and friends who find themselves holding a now ineffective power of attorney can gain the ability to act through the probate process, if needed.
Sources:
- “Alaska Statutes 2020.” The Alaska State Legislature, 2020. akleg.gov
- “Georgia Code Title 53. Wills, Trusts, and Administration of Estates.” Find Law, 14 April 2021, codes.findlaw.com