Being granted power of attorney is a major responsibility. However, it can be confusing to understand where your responsibilities end and begin. This is especially true when a loved one passes away. If you have been entrusted with this responsibility, you may wonder if power of attorney is valid after death.
Power of attorney only grants authority while the principal is alive. It’s often confused with being the executor of an estate, who is someone who receives control when the person designating the executor has passed away. While the same person can be an executor and hold power of attorney for convenience, their legal distinctions matter.
Is Power of Attorney Valid After Death?
Power of Attorney (POA) ceases upon the principal’s death. It grants authority only while the principal (the person POA is for) is alive. It’s often confused with an estate executor, who is the person responsible for settling someone’s affairs after they pass away.
An executor manages a deceased person’s estate, distributing assets according to the will, while a POA grants decision-making authority during the principal’s lifetime. Understanding this distinction is vital for proper legal and financial planning.
What Is the Power of Attorney?
Power of attorney is the legal authority granting you (the agent or attorney-in-fact) the authority to make decisions on behalf of the principal. Primarily associated with estate planning, a POA extends control over various areas of decision-making, including:
- Finances
- Health
- Legal matters
Power of attorney becomes essential when the principal is incapacitated due to illness or the challenges of advancing age. Survey data estimates that only about one-third of U.S. adults have designated someone to have power of attorney in healthcare situations. If you aren’t in that group, it’s advisable to discuss POA as part of your overall estate planning.
While commonly invoked in times of incapacity, a POA can also be temporary and situational. For example, someone going on an extended overseas trip might transfer temporary power of attorney to a relative to manage their domestic affairs. Similarly, a business owner may empower an associate to make decisions on their behalf.
It’s important to understand that the authority granted by power of attorney is limited to the principal’s lifetime, ceasing upon their death. For example, you may have a POA for an elderly parent, enabling you to manage their finances. This authority ends immediately upon their passing. Not recognizing this, manipulating financial assets, and failing to file probate can lead to legal consequences, constituting a possible crime.
What Is an Executor?
An executor of an estate, like someone with power of attorney, is an individual designated to oversee the administration of a person’s assets and affairs. In this case, they receive control when the person designating the executor has passed away.
This responsibility can be explicitly outlined in the deceased’s will or appointed by the court if there is no specified executor. The executor’s primary duty is to ensure the deceased’s wishes, as outlined in the will, are carried out following legal requirements. This includes settling any debts or taxes as well as distributing assets to the designated beneficiaries.
It’s common for individuals to appoint the same person with both power of attorney and executor roles as part of their estate planning. For instance, the eldest child in a family might be named in both capacities for convenience and familial trust. However, it is crucial to recognize that legally, these are distinct roles.
While power of attorney grants authority to manage financial and legal matters during the person’s lifetime, the executorship comes into play specifically after death. Those granted power of attorney should not automatically assume the role of executor without explicit authorization from the deceased’s will or legal appointment by the court.
It’s essential to understand and respect the legal distinctions between these roles. This ensures a smooth and lawful execution of the deceased person’s estate.
Do you have questions about managing an estate? Contact us today and learn how we can help.
“Is power of attorney valid after death?” can be a common question, but that legal authority is only effective during the principal’s lifetime. It’s essential to differentiate it from an executor since this distinction can be significant in legal and financial planning. Awareness of the limited lifetime authority of power of attorney helps avoid potential legal consequences. Although an individual may simultaneously serve as an executor and hold power of attorney for convenience, recognizing their legal distinctions is crucial.
At Johnson, Murrell, & Associates, we understand that handling a loved one’s estate and bills after their passing is an emotional, stressful experience. Our job is to make your life easier, which means guiding you through the process so you understand what’s to come. To schedule a consultation, call us at 865-453-1091 or schedule an appointment.
