People often ask, can I obtain financial power of attorney after death? The answer: no. Power of attorney must be given when the principal (the person giving POA) is still alive and ends upon his/her passing. A common misconception is that POA lasts after the person passes, giving the agent the right to continue dealing with the decisions. In reality, this is not allowed if you have simply been named as the POA; one must also be the executor of the estate to continue handling the dealings of the estate after the passing of the principal.
Why Does Power of Attorney Cease?
Legally speaking, a deceased person cannot hold assets, so the power of attorney over those assets ceases to exist. The assets go from the person, to the estate, and therefore the executor of the estate gains control. For example, say there was an investment account that you hold POA over for a family member. As soon as the institution learns that the family member has passed, assets in that account are frozen until the administrator of the estate contacts the institution to release the funds.
What is an Executor/Administrator of the Estate?
Once a person passes, his/her assets are distributed according to his/her will through a process called probate. The importance of having a will is covered in another blog. What you need to know here is that going to probate because you did not have a will can be an expensive, painful process; it is always best to have a will in place regarding last wishes. The executor is the person who will be handling the process while the will is executed and distributed. If there is no executor in the will, one will be appointed by the court.
The process of probate essentially allows the transition of assets from one party to the living heirs. If you are named the executor of the estate, you will have the aforementioned duties of administering the will.
One of the easiest things to do that simplifies this process is to have someone listed jointly on assets. This does not work on everything, and it is still best that a will is in place; however, this strategy does work in some cases. Take a bank account, where it is possible to have joint ownership of an account. If you were to be on an account where the primary account holder passes away, then the account would automatically be given to you.
In order to have your wishes followed, it is very important to have Powers of Attorney for when you are alive and a Will for when you have passed away. If you are unsure of your end of life plans, getting an attorney involved can make sure that everything is arranged. Contact Susan Sandys for your estate planning needs.