What Happens With Power of Attorney After the Death of the Principal
What happens with a power of attorney after the principal dies? Is the contract still valid? What about debts? Are you responsible for them if you were appointed as an agent in the deceased person’s power of attorney document? DoNotPay elaborates on this topic so that you know where you stand and what your responsibilities are.
A power of attorney (POA) expires in the following cases:
|POA Termination||Additional Info|
|The principal becomes incapacitated||While general, limited, and financial powers of attorney end in this event, a:
|POA is revoked||The principal can decide to revoke a POA for any reason|
|The agent cannot fulfill the defined responsibilities||A POA will end if the agent can no longer keep up with the specified activities and obligations|
|The principal dies||Any type of power of attorney ends with the principal’s death|
While a durable power of attorney grants the agent the authority to act on the principal’s behalf if they become mentally incapacitated, this POA—like any other—ends when the principal passes away.
A standard or general POA expires when the principal:
- Becomes mentally incapable
Did the POA principal give you the authority to act on his or her behalf in numerous financial matters, e.g., to buy or sell property or pay the bills? Should you keep managing these affairs when the principal dies?
Not only that you shouldn’t do this, but you also can’t unless you are also the executor or administrator of the principal’s estate.
The agent appointed in the power of attorney letter is not responsible for the remaining debts when the principal dies, except in the following cases:
|The Agent Needs To Settle Debts||Explanations|
|The agent was also a co-signer of a loan||Both parties are responsible for the outstanding balance if they:
If one person dies, the other one must settle the remaining debt
|The principal and the agent hold a joint account||If the POA parties shared an account, the agent is responsible for the remaining debt upon the principal’s death|
|The agent was the principal’s spouse||Spouses are responsible for any remaining debts if they live in community property states, i.e., in Arizona, California, New Mexico, Louisiana, Nevada, Idaho, Texas, Washington, and Wisconsin|
Additional exceptions can apply depending on the state of residence, so you should check your local legislation.
When a person dies, their remaining debts transfer to their estate, so the executor or trustee of the estate—appointed to handle the final affairs—needs to settle these debts.
The principal appoints both a power of attorney agent and an executor of his or her will. With the principal’s death:
- Executor’s obligations come into effect
- POA agent’s responsibilities and authorities end
If the same person is both the POA agent and the executor of the will, he or she must continue handling the principal’s affairs until the heirs listed in the will take over.
Power of attorney becomes invalid when the principal dies. If the principal didn’t make a will, his or her assets will go through the probate process, during which the court appoints an estate administrator.
The administrator’s role is similar to the one of the executor, i.e., that person must:
- Manage the principal’s financial affairs
- Oversee the distribution of the deceased person’s assets
Whatever role you play in the power of attorney arrangement, you shouldn’t take it lightly. It’s a legally binding document, so agree to enter this contract only if all the crucial aspects are covered.
You don’t have to research your state legislation, hire a pricey lawyer, or rely on generic online templates to prepare your power of attorney. DoNotPay will help you with this matter!
We gather relevant (legal) data and generate a POA document tailored to your specific needs. Subscribe to DoNotPay and complete these steps:
- Select our Power of Attorney product
- Answer a few questions from our chatbot
Our AI-powered app will generate the POA document suited for your particular situation. We’ll also send you two important notices both parties should review.
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