There are several ways in which a power of attorney (POA) document can be written. The wording in this document can be customized to dictate what specific powers the principal (the person who signs the POA) grants to the agent (the person named to act on the principal’s behalf) and when these powers can be used. For example, a durable POA document is ideal because an agent retains the ability to act for the principal even if he or she becomes incapacitated, which is when this power is most important.
Regardless of when the document takes effect, all powers under a POA end upon the principal’s death. (The only exception is with a non-durable POA, which ends if/when the principal is deemed incompetent.) Once the principal has died, the agent loses all ability to act in their stead both medically and financially.
Accessing Assets After a Loved One’s Death
Of course, medical POA is no longer needed for a loved one once they’ve passed away. However, most people leave behind bills that must still be paid, and access to their finances is required to see to these matters. Many family caregivers who were named as an elder’s financial power of attorney are surprised to find out that their POA is invalid and they no longer have legal access to their loved one’s bank accounts.
There are only a few ways in which a family caregiver who was previously given financial POA would be able to gain access to their deceased loved one’s assets.
- The Agent Was Also Named As Executor
If the decedent drafted and signed a valid will that names an executor, then that person will have access to the accounts for the purpose of administering the estate and guiding the probate process. The agent under POA must forfeit their financial access unless they were also named as executor in the will.
- The Agent Was Named As a Beneficiary or Joint Owner of Accounts
The POA retains access to any of the decedent’s assets that name them as a joint owner or payable-on-death (POD) or transfer-on-death (TOD) beneficiary. Assets that commonly carry POD/TOD designations or can be jointly titled include life insurance proceeds, bank accounts, retirement accounts and brokerage accounts. When titled correctly, these assets typically do not have to go through the lengthy probate process because they pass directly to the named individual.
- The Agent Must Petition to Become Executor of the Estate
If the decedent died without a will (intestate) or had a valid will but did not name an executor (also known as a personal representative in some states), then the agent can petition the local probate court to be appointed as such, which would then give them access to the estate. If the POA’s appointment as executor is opposed by someone else who wishes to serve in this role, the fact that the decedent named this person as their agent can be used to support their appointment.
Keep in mind that, if a person has been named as an agent under a financial POA and/or the executor of an estate, both these responsibilities require a fiduciary obligation. This means that an agent has a legal duty to act in the best interests of the principal and the executor has a legal duty to act in the best interests of the estate and its beneficiaries.
For more information on power of attorney documents, trusts and estate planning, use the AgingCare directory to find an elder law attorney in your area.