A Power of Attorney is an essential document that ensures one's assets, bank accounts, and other financial affairs can be managed by a trusted loved one. But what about after the principal of that POA dies? Can the agent under the POA still manage his or her affairs?
The answer is no.
The authorities granted by a Power of Attorney stem from the principal himself. He or she is granting the agent the power to manage their affairs and act on their behalf, essentially to do something that the principal could do for himself or herself. However, this power only extends for as long as the principal grants it, and can be revoked at any time, for any reason. The POA expires at the death of the agent since he or she can no longer act, and therefore the agent can no longer act on their behalf.
Unfortunately, some people do not understand that a POA does not extend after death, and they attempt to rely on this document to allow loved ones to manage their affairs after they pass away. Perhaps an adult child has been caring for an aging parent using a POA. When the parent dies, the child goes to the bank hoping to close their accounts, but finds they are no longer authorized to do so. If the parent had no other estate planning documents in place, their children or loved ones must then work with the courts to settle the estate, which can be a stressful, expensive, and lengthier process than had the person created a Will or Trust to provide for the distribution of their assets following their death.
This is a major estate planning mistake that can easily be avoided by having a full will-based or trust-based estate plan. After your death, the only person who has authority to manage your affairs and settle your debts is your personal representative (also called an executor) designated by your Will (or a Trustee designated by a trust). The personal representative is charged with marshalling your assets, paying off any remaining debts, and then distributing remaining assets according to your wishes, or, if you did not have a will, distributing your assets according to state law – which may not be the distribution plan you would choose.
If you do not have a valid Will in place, you will be considered to have died intestate and, as mentioned, the courts will oversee the distribution of your estate under state law. If you're ready to protect yourself and your family with a custom estate plan to ensure your wishes are known and followed, call Peach State Wills at. 678.344.5342. For more information on estate planning, click here to request our free Guide to Estate Planning in Georgia.
Remember: Estate planning doesn't have to be hard, and we can help.SM