While there are many types of powers of attorney, each with different rules and implications, all powers of attorney end upon the death of the principal. If powers of attorney are used after a principal’s death, it is considered power of attorney abuse.
A power of attorney (POA) is a legal agreement a person (called the principal) signs to entitle another person (called the agent or attorney-in-fact) to act on their behalf in certain situations.
POAs are most often enacted as precautionary measures. For example, you may enact a general power of attorney to enable a trusted agent to manage your financial and legal affairs for you or a health care power of attorney to enable an agent to make medical decisions for you in the event you lose capacity during your lifetime.
That said, POAs aren’t limited to protecting people with capacity issues; they can have many purposes. You may enact a limited power of attorney, for instance, to enable a business partner to sign legal documents on your behalf while you are on vacation. In essence, POAs can be as broad or limited in scope as the principal desires.
Principals can also control when POAs take effect, as well as how long they will remain in effect. A nondurable power of attorney takes effect upon signing and remains in effect until the principal’s incapacity or death. A springing power of attorney takes effect only after the principal’s incapacity. A durable power of attorney takes effect upon signing and remains in effect until the principal’s death, even if the principal loses capacity prior to death.
It’s important to bear in mind that, even though two powers of attorney may be categorized in the same way, their terms may be different. It is crucial for agents, principals and principals’ loved ones to familiarize themselves with the terms of powers of attorney to protect against power of attorney misconduct.
It’s also recommended that you familiarize yourself with how a POA works. For example, a POA cannot be enacted by someone who lacks capacity. If such a person needs assistance managing their personal or financial affairs, they may require conservatorship. A POA also cannot be revoked by someone who lacks capacity, although someone with capacity can revoke a POA at any time.
While the line between what constitutes power of attorney abuse and what doesn’t may not always be clear before death, the same isn’t true after death. Any use of a POA after death is unauthorized.
Power of Attorney Post-Death Rules
The main power of attorney post-death rule you must remember is: A power of attorney cannot be used after the principal’s death for any reason.
How long does a power of attorney last after death? Powers of attorney end immediately upon the death of the principal without exception.
Does a power of attorney expire on death automatically? An agent’s powers automatically end upon the principal’s death. Therefore, no further action will be required by the agent or anyone else to end the power of attorney.
Is a power of attorney valid after death for any purpose? There is no justifiable purpose for a power of attorney to remain valid after death, since the principal’s assets, by default, will become a part of their estate, which is managed by the personal representative (i.e., the executor/administrator).
Why Does a POA End at Death?
A POA ends at death because it is intended to help the principal only while they are alive.
In addition, when a principal dies, control of their assets shifts to their estate, which is managed by the personal representative. An agent would therefore be redundant.
Furthermore, if a POA were to remain active after death, it could create confusion as to which responsibilities belong to the agent and which belong to the personal representative of the decedent’s estate.
In sum, a power of attorney ending at death can help ensure estate administration is efficient, proper and carried out according to the decedent’s wishes.
6 Steps to Take if an Agent Uses a Power of Attorney After Death
If you have reason to believe an agent may be using a power of attorney after death, it’s crucial you take the steps described in this section to stop its wrongful use. By taking swift action, not only could you prevent further damage to the principal’s estate, but you could undo the damage the agent may already have caused.
While it is generally possible to recover assets lost to power of attorney abuse, it can be challenging to do if significant time has passed. Additionally, when there is too long of a delay, a more complex and expensive court battle is likely to result.
Keystone represented a client who was administrator of her brother’s estate. Having noticed irregularities in his financial records, she was concerned that his estate may be missing assets. Keystone helped facilitate the appointment of a third-party “receiver” to investigate the irregularities. The receiver discovered that two individuals, masquerading as the decedent’s caregivers, had misused a power of attorney to siphon funds from the decedent’s accounts and misappropriate his property after his death. Thanks to the client’s swift action in seeking our help, the receiver was able to recover $2 million in stolen assets from the financial abusers. What’s more, Keystone assisted in securing a judgment that will require the abusers to pay an additional $1 million in damages.
1. Get in Touch with a Fiduciary Misconduct Attorney
It’s crucial you touch base with a fiduciary misconduct attorney at the first sign of power of attorney abuse after death.
Even if you are unsure whether abuse is taking place, a fiduciary misconduct attorney could help you investigate your suspicions. They will know what red flags to look for and where to find them, and can assist you in determining whether further action is required.
2. Notify Relevant Institutions of the Principal’s Death
An important step of the probate process is notifying relevant financial institutions about the decedent’s death. This can help ensure a power of attorney isn’t used after death to access accounts housed at those institutions.
While completing this step may avert further power of attorney abuse, additional steps may need to be taken to reverse the damage the abuse already caused. For example, if an agent wrongfully withdrew funds from the principal’s accounts after their death but before the institutions had been notified, legal action may need to be taken to recover the funds.
To prevent such complications, it’s ideal to start the probate process as soon as possible after the decedent’s death. To start the probate process, an interested party (typically the nominated executor) will need to file a petition for probate.
After a personal representative has been formally appointed by the court, they can closely monitor estate assets and take steps to keep them protected.
3. Create a Detailed Timeline
If it’s evident a power of attorney was used after a principal’s death, it’s crucial to create a detailed timeline that begins when the power of attorney took effect and ends at the agent’s last known transaction on behalf of the principal.
While an agent’s pre-death transactions may be valid, they are nevertheless worth reviewing. If an agent is misusing a power of attorney after death, it could suggest they were misusing the power of attorney before death as well.
Be sure to include in your timeline all the agent’s unauthorized transactions before death, the precise date and time of the principal’s death, and all the agent’s unauthorized transactions after death. This will help both you and your attorney understand the extent of the agent’s abuse of authority.
4. Take the Appropriate Legal Action
If you can prove an agent used their power of attorney after death, you can file a petition seeking an injunction to stop further use of the power of attorney, recovery of assets lost to the abuse and possibly even damages. If your case progresses to trial and you win, you may even be able to seek an award of your attorney fees and costs.
That said, most litigants aim to resolve their cases before they progress to trial because of how expensive trials can be. To resolve a case before trial, all the parties involved in the dispute must agree to settle, which usually occurs after the parties attend mediation (i.e., legally binding negotiations that are held outside of court and led by a neutral third-party mediator). Only if a settlement can be reached can trial be bypassed. Keep in mind mediation is available even after a trial has already begun.
Whether your case involves power of attorney abuse after death, before death or both, you only need to file one petition. It should specify all the unauthorized transactions an agent is suspected of making, as well as the legal remedies you are seeking to hold the agent accountable. It may also be appropriate to describe and attach any evidence you have to support your claims and provide background for your case.
5. Gather Evidence
As with any court case, you will need evidence to prove your claims of power of attorney abuse. Most financial transactions have a paper trail, so evidence shouldn’t be difficult to gather if you have an experienced fiduciary misconduct attorney helping you.
Evidence can include everything from the power of attorney agreement itself to bank statements, receipts and witness testimony. The only requirement is that the evidence be relevant.
If an agent has been careful to hide their indiscretions, tracking them could prove difficult. If this is the case, your attorney may suggest working with a forensic accountant to determine the specific ways in which the agent abused their authority and the financial losses the agent caused.
Remember, under no circumstance can a power of attorney be used after death, so any transaction made by an agent after death is considered invalid by default. This includes transactions made after death that would have been valid under the power of attorney had they been made before death.
6. Attend the Court Proceeding with your Attorney
If you were either unable or unwilling to resolve your dispute at mediation, your case will go to trial. It is crucial you attend court proceedings with your attorney and be punctual.
At the court proceedings, your attorney will be instrumental in presenting evidence and arguments to the court in support of your position.
If your lawyer is successful in proving to the court with a preponderance of evidence that the agent more likely than not committed the abuse that is alleged in the petition, you will win your case.
If you do win, you can seek an award of your attorney fees and costs, though keep in mind that such an award is not guaranteed.
Who Can Sue When an Agent Uses a POA After Death?
In most cases, the only parties with standing to sue a power of attorney after death are the personal representative of the decedent’s estate and/or the decedent’s beneficiaries or heirs.
Personal Representative
A personal representative has standing to sue an agent if they have abused their authority, since they represent the estate beneficiaries and are obligated to always act in their best interests.
Whether an agent has misappropriated money from a principal’s accounts before their death or is misappropriating money from a principal’s accounts after their death, they are effectively stealing from the principal’s estate, which directly affects the beneficiaries. For this reason, a personal representative may not only be authorized to sue an agent for abusing their power of attorney, but they may have a duty to do so.
Keep in mind the personal representative generally is permitted to use estate funds to litigate power of attorney abuse.
Beneficiaries and Heirs
Although it is rare for beneficiaries and heirs to sue an agent for abusing a power of attorney, they may have standing to do so.
Suppose a beneficiary believes an agent has been abusing a power of attorney after death, but the personal representative does not. In such an instance, the beneficiary, so long as they have standing, could sue the agent themselves. If they win, they may be able to recoup their attorney fees and costs from the estate.
For a beneficiary or heir to have standing, the agent’s alleged abuse must impact their inheritance. For example, if a decedent’s will calls for the entirety of a bank account to pass to a particular beneficiary, and that beneficiary suspects the decedent’s agent to be wrongfully withdrawing cash from that account after death, that beneficiary, as well as the personal representative, would have standing to sue the agent, but the other beneficiaries generally would not.
That said, beneficiaries or heirs should consult with a knowledgeable fiduciary misconduct attorney before pursuing legal action against an agent to ensure it is in their best interest to do so. It is almost always more appropriate for a personal representative to sue an agent rather than a beneficiary or heir.
FAQs: Power of Attorney Upon Death
Still have questions about what happens to a power of attorney after death? Check out our frequently asked questions below to see if you can find the answers you’re looking for there. If you can’t, you may wish to contact our firm for personalized guidance.
Does a durable power of attorney end at death?
Yes, a durable power of attorney ends at death. As previously mentioned, all powers of attorney end at death, regardless of type.
Many people mistake the word “durable” to mean a power of attorney remains active after death, but what it really means is the power of attorney remains active for the lifetime of the principal — that is, unless it’s revoked.
Can a power of attorney withdraw money after death?
No, a power of attorney cannot be used to withdraw money after death. Because an agent’s authority ceases the moment the principal dies, the principal’s financial accounts will be off limits to the agent after the principal’s death.
Can a power of attorney cash a check after death?
No, a power of attorney cannot be used to cash any checks in the name of the principal after death.
If an agent receives or is in possession of any of the principal’s checks after death, they must turn them over to the personal representative.
Can a power of attorney change a will after death?
No, a power of attorney cannot be used to change a will after death or before death. In other words, it is never appropriate for an agent to change a will.
That said, if a principal has not yet died, the agent can generally move around the principal’s assets, which could change the dispositive properties of the principal’s will. However, they would only be authorized to move around assets if doing so would benefit the principal.
How long does a notarized power of attorney last?
How long a notarized power of attorney lasts depends on the terms of the agreement.
For example, a nondurable power of attorney generally lasts up to the point the principal loses capacity. A durable power of attorney, on the other hand, generally lasts for the principal’s lifetime, so long as it is not revoked before the principal dies.
Put simply, a power of attorney being notarized does not make it last longer. All POAs end at death.
Can you get a power of attorney after death?
If you are asking about how to become a power of attorney after death, you are asking the wrong question. Powers of attorney are reserved for supporting the principal during their lifetime.
After a principal’s death, their assets will become a part of their estate, which generally falls under the authority of the executor if the principal died with a will or the administrator if the principal died without a will.
How long should I keep power of attorney documents after death?
Because powers of attorney cease at death, it generally is unnecessary to hold on to power of attorney documents after the principal has died.
Still have questions about what happens to a power of attorney upon death?
The fiduciary misconduct attorneys at Keystone Law Group specialize in uncovering and litigating cases of power of attorney abuse after death.
Agents engaged in misconduct often go to great lengths to hide their actions, making it essential to have a skilled attorney on your side. Our experienced team is adept at swiftly identifying and stopping power of attorney abuse after death, as well as working to reverse any harm it may have caused.
You can trust us to handle your case with efficiency, expertise and dedication.
