Because a power of attorney expires upon the death of the principal, it cannot be used after their death to withdraw money from their accounts. If someone uses a power of attorney to withdraw money after death, they are engaged in power of attorney abuse.
A power of attorney is a legal agreement signed by one party (the principal) to allow another party (the agent or attorney-in-fact) to make decisions on their behalf.
While there are many types of powers of attorney, each with different functions, none of them persist through death. Put simply, there are no circumstances under which an agent can withdraw money after death.
Can a Power of Attorney Access a Bank Account After Death?
A power of attorney cannot be used to access a bank account after death, because powers of attorney, without exception, expire at death.
Even if they do not withdraw any funds, an agent accessing a principal’s bank account after death would be considered improper, since to access the bank account, they would need to use their power of attorney, which is invalid after death. If they were to use their power of attorney anyway, they would effectively be committing fraud.
How Long Can a Power of Attorney Withdraw Money After Death?
There is no amount of time a power of attorney can be used after death. All powers of attorney cease the moment the principal dies.
Can a Power of Attorney Close a Bank Account After Death?
A power of attorney cannot be used to close the principal’s bank account after death.
Since a power of attorney expires once a principal dies, their bank account can only be closed by the beneficiary on the account claiming the account directly from the bank, or the executor/administrator or trustee claiming the account on behalf of the principal’s estate or trust, respectively.
Can a Power of Attorney Close a Joint Bank Account After Death?
A power of attorney cannot be used to close a joint bank account after death. Not only is a power of attorney invalid after death, but joint bank account rules state that once a joint account owner dies, the surviving joint owners take over their the deceased joint owner’s share of the account.
Because this process is automatic, joint account owners don’t have to do anything to assume ownership over the deceased owner’s share of the account.
How to Remove a Power of Attorney From a Bank Account After Death
Because a power of attorney expires automatically upon the principal’s death, there is nothing that must be done to remove an agent’s access to a principal’s bank account.
That said, if a bank account is still active after a principal’s death because the bank has not been notified of the death and no one has claimed the account, the agent could theoretically still use their power of attorney to access it, even though this would be unlawful. This is why it’s important to act quickly to claim a deceased person’s bank account if you are entitled to it.
How to Handle a Power of Attorney Withdrawing Money From a Bank Account After Death
When a power of attorney is used to withdraw money from a principal’s bank account after death, it’s crucial you act quickly to close the account and hold the agent responsible for their misdeeds.
Although you may not be able to immediately recover the money the agent misappropriated from the principal’s bank account after closing it, you can help prevent additional improper withdrawals by the agent, which will protect the contents of the account from further harm.
1. Notify Financial Institutions of the Account Holder’s Death
When a person dies, their bank should be notified about their death as soon as possible. This is usually done by the executor or administrator of the decedent’s estate presenting the bank with a certified copy of the decedent’s death certificate.
If you are the designated beneficiary on an account, you can claim the account immediately upon the decedent’s death without the account passing through the probate process, so long as you have a certified copy of the decedent’s death certificate that you can present to the bank. By not delaying claiming the account, you can protect the account from unlawful withdrawals, and, by extension, your inheritance.
2. Consult with a Fiduciary Misconduct Attorney
If it comes to light that an agent may have used a power of attorney to make unlawful withdrawals from a bank account after death, consulting with an experienced fiduciary misconduct attorney about your legal options for recovering the misappropriated funds is essential.
An agent should be aware that their power of attorney ceases at death, so if they are using it to make withdrawals from a deceased person’s bank account, they may be flagrantly disregarding their fiduciary duties for personal gain. This is unacceptable and should be stopped before they’ve managed to irreversibly harm the account.
3. Investigate the Agent’s Withdrawals and Gather Evidence
If an agent is abusing their power of attorney after death, it wouldn’t be surprising if they had been abusing their power of attorney before death as well.
For this reason, it’s crucial you work with your attorney to carefully inspect all the transactions the agent made on the principal’s behalf before and after their death to determine which ones were proper and which ones weren’t.
As you inspect these transactions, also look for relevant evidence to support your claims. For example, you may look for bank statements, receipts and other financial records that indicate the agent may have made improper withdrawals from a principal’s bank account.
4. File a Petition Seeking to Recover the Misappropriated Funds
Once you have a grasp of the extent of the agent’s alleged abuse, you can begin drafting a petition with help from your attorney. Your petition should list every breach of fiduciary duty the agent is suspected of having committed and provide supporting information. It, likewise, should list the remedies you are seeking to hold the agent accountable.
Although you may not have ample evidence at this stage of the process, you may wish to mention any relevant evidence you do have and attach it to the petition to strengthen it. A strong petition can bring the opposing party, who, in this case, would be the agent, to settle faster, saving you time and money.
5. Consider Settling
If all the parties to a dispute are amenable to it, you may wish to consider settling your case at mediation (i.e., negotiations among the parties held outside of court and presided over by a neutral third-party mediator).
Mediation can help facilitate a speedier resolution, eliminating the need for an expensive, drawn-out trial.
6. Attend Court Proceedings with your Attorney
If you and the opposing party are unable or unwilling to reach a settlement deal, going to court may be your only remaining option.
When attending court proceedings, make sure you are accompanied by your attorney and are punctual.
7. Seek an Award of Your Legal Costs If You Win
If you win your lawsuit against the agent at trial, you may be able to seek an award of your attorney fees and costs from the agent. If the court grants the award, the agent will be required to reimburse you.
That said, an award of attorney fees and costs is not guaranteed, so you should never go into trial expecting it as an outcome. Rather, you should expect to be responsible for your own attorney fees and costs.
FAQs: Powers of Attorney
If you still have questions about how powers of attorney work before and after death, explore our frequently asked questions below.
Does a power of attorney end at death?
Yes, a power of attorney ends at death without exception. If a power of attorney is used after death for any purpose, it is considered power of attorney abuse and should be appropriately litigated.
Can a power of attorney transfer money to themselves?
No, a power of attorney cannot transfer money to themselves unless the power of attorney agreement explicitly gives them permission to do so. If a principal has capacity, they also can expressly authorize an agent to transfer money to themselves.
That said, agents must be mindful of their fiduciary duty to act in the best interests of the principal at all times.
Can a power of attorney open a bank account?
Yes, an agent with financial power of attorney can generally open a bank account, but only before the principal’s death.
Can a power of attorney change beneficiaries on bank accounts?
Yes, a power of attorney can usually be used to change beneficiaries on bank accounts, but the power of attorney agreement must expressly give the agent this right, and the changes the agent intends to make must be in the best interests of the principal.
Still have power of attorney concerns?
Navigating powers of attorney can be challenging without proper legal guidance, especially given the broad authority agents often have over a principal’s assets, which creates significant potential for abuse.
At Keystone, our experienced fiduciary misconduct attorneys can help safeguard a decedent’s assets and protect the interests of beneficiaries by identifying and litigating instances of power of attorney abuse. Our attorneys can also defend agents in disputes.
Reach out to our firm to learn the specific ways we can help you.
