What Happens With a Power of Attorney if Someone Gets Divorced?

By Beverly Bird

A power of attorney in the hands of a disgruntled spouse can have disastrous results. A POA allows the agent -- the person granted the power -- full ability and authority to enter into any transaction on behalf of the principal -- the individual who granted her the power. She can use the POA to sell or otherwise transfer ownership of assets pre-divorce. She can also use it to gain sensitive information regarding accounts, assets and debts for use in a divorce. She can contract for debts in the principal’s name.

Automatic Revocation

In 10 states, the date of divorce automatically revokes powers of attorney granted from one spouse to another. These states include Wisconsin, Alabama, Texas, California, Pennsylvania, Colorado, Missouri, Illinois, Minnesota and Indiana. However, powers of attorney remain in full force and effect pending the divorce and until it is final, unless they're revoked. Some states, such as Texas, allow a power of attorney to continue past the date of divorce if it contains language superseding the event. The principal must state specifically that he intends the power of attorney to remain in effect, even if the parties divorce.

Other States

In the remaining 40 states that don't automatically revoke POAs in the event of divorce, a divorced agent spouse can continue using the POA until the principal takes steps to revoke it. A revocation is a signed and written statement that identifies the principal and the agent to whom he gave power. It states clearly that the principal wants to revoke the power of attorney and attests that he is of sound mind at the time he makes the revocation.

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Precautions

Even in states where divorce automatically revokes POAs, the institutions with which the agent spouse has the right to interact might not be aware that a divorce has occurred. If she presents the POA and attempts a transaction, they may not know that the POA is no longer valid. It’s usually a good idea to officially revoke the POA anyway, even if the divorce does it for you. Take copies of the revocation to each such institution, advising them of the new status quo. Institutions are within their legal rights to honor a power of attorney if they have not received notice that it is revoked. A principal can revoke his power of attorney at any time, even prior to divorce and in states that automatically revoke them at the time of divorce.

Divorce Documents

A power of attorney does not authorize the agent spouse’s signature on divorce documents on behalf of the principal spouse. Even if the principal does not revoke the power of attorney, she can’t use that power to sign a marital settlement agreement or any other divorce paperwork for him, because she herself is part of the divorce litigation.

Other Circumstances

Divorce generally does not have any impact on a power of attorney the principal may have granted to someone other than his spouse. The power of attorney is a legal agreement between the principal and his agent, and it is not dependent on his marital status.

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Can a Power of Attorney Be Changed if a Couple Is Not Divorced Yet?
 

References

Related articles

Laws for Power of Attorney in New Hampshire

New Hampshire financial power of attorney laws set forth the rules and limitations under which a person, known as the principal, may grant authority to another person, known as the agent, to act on their behalf. The agent acting for the principal can do whatever the principal has allowed her to do, as outlined in the power of attorney document. In New Hampshire, an agent may have broad authority that includes signing the principal's real estate deal papers and completing the principal's banking.

Can I Refinance With Power of Attorney?

When you are named as a financial agent under a general power of attorney, you have the right to undertake any action the principal could undertake herself. This includes applying for bank loans on her behalf or refinancing the loans she already holds.

Can a POA Change a Will?

A power of attorney allows a person, referred to as an agent or attorney at law, to act on behalf of another person, the principal. The authority is granted to the agent upon the execution of a power of attorney document that is signed by the principal. Although an agent can make important decisions and perform certain actions for the principal, the agent cannot alter a will, a document consisting of the principal's directions for his estate after his death.

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