What Happens When a Deceased Has No Power of Attorney?

by Elizabeth Rayne

    Death can bring about confusion regarding who has control over a decedent's finances. Because a power of attorney for finances expires upon the death of the principal, or by an earlier termination date, the executor of a will is charged with settling posthumous estate matters. During the life of the principal, however, a POA can grant either limited or broad powers to the agent and can be written to either terminate or continue when the principal becomes incapacitated.

    Limited and Broad Power of Attorney

    A financial power of attorney grants another person, known as an agent, powers to act on behalf of the grantor, or the principal. The power of attorney is a legal document that specifies the extent of the authority the principal has given the agent. The principal may grant an agent limited or broad authority, also known as a general power of attorney. A limited, or special, power of attorney may grant an agent the authority to perform a specific act, such as selling a house on behalf of the principal. On the other hand, a general power of attorney may allow the agent to take care of all financial responsibilities for the individual, such as paying bills or filing taxes, as laid out in the agreement.

    Durable Power of Attorney

    A durable power of attorney allows the agent to act even when the principal becomes incapacitated or incompetent. Most POAs are durable, unless provided otherwise in the agreement. Throughout the process, the agent is restricted to acting only as directed by the agreement. Many individuals use a durable power of attorney so they can select an agent while they have the ability to do so. If your POA is not durable, the court may appoint a guardian to act on your behalf if you become incapacitated.

    Power of Attorney Expiration

    Certain events may trigger the expiration of a power of attorney and, in all cases, a POA ends with the principal's death. Consequently, a deceased person cannot have a POA agent to take care of his finances. An agent is barred from acting on behalf of the principal after the agent knows he has died. Further, some POAs may specify that the agent's authority to act ends on a specific date or after a specific event occurs, such as the sale of a house.

    Executorship

    Since an agent cannot take care of your affairs after your death, you may instead appoint an executor to handle your estate when that time comes. If you have a preference for a particular person to take care of your financial matters after you die, you may consider drafting a will that names that individual as executor of your estate. Also known as a personal representative, an executor is appointed by the court following the death of an individual to administer the decedent's estate.

    About the Author

    Elizabeth Rayne earned her J.D. from Penn State University and has been practicing law since 2009, advising clients on issues ranging from employment law to nonprofit management. For two years, she served as a contributing editor for the "Vermont Environmental Monitor."

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