Is a Power of Attorney Effective After the Principal Dies?

This is a question that our clients ask us a lot, and the short answer is no. To understand why that is, it is useful to have a bit more background information on what powers of attorney are meant to do. Many people are familiar with the concept of a power of attorney.  There are two primary types of power of attorney: the statutory durable power of attorney (sometimes commonly referred to as a financial power of attorney or a general power of attorney) and the medical power of attorney (also called power of attorney for healthcare). The statutory durable power of attorney is used for all non-medical decisions, such as real estate transfers and banking transactions.

The statutory durable power of attorney can be very helpful, for example, in caring for an elderly parent with declining mental capacity, allowing an adult child to help with financial matters.  A power of attorney is often a very cost-effective and simple alternative to guardianship when the principal is not capable of making decisions but does not otherwise pose a threat to himself or herself.

The important thing to understand, however, is that a statutory durable power of attorney does not survive the death of the principal.  Even if you had the power of attorney for someone while they were alive, this does not empower you to make financial transactions or real estate transactions on their behalf after they die.  This is a common misunderstanding.

A power of attorney is not a substitute for a Last Will and Testament. A valid, self-proved will provides authority for the person named as executor to make transactions on behalf on the estate, as long as it has been admitted to probate. Thus, powers of attorney are essential tools in an estate plan in that they provide a way for loved ones to make important decisions and conduct important business for someone who is incapacitated. But powers of attorney cannot give authority to someone to conduct business on behalf of your estate.  For that, you need a well-rounded estate plan that includes a will.

 

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