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What happens to powers of attorney following death?

Powers of Attorney are written by Principals to give authority to Agents to handle financial matters. When the Principal passes away, the Power of Attorney ends. Misunderstandings sometimes occur when a friend or relative is given authority to deal with financial matters under a Power of Attorney (POA) and tries to continue handling these matters after the Principal has passed away.

Mistakes are made

It is usually an innocent mistake. If you have POA to pay the Principal's bills and that person dies, you may feel it is only common sense to write checks for the outstanding bills.

That's the mistake.

The moment a person dies, the POA also dies. From that point on, bills are to be paid by the personal representative of the decedent's estate.

Once the individual dies, Executors and Administrators are typically responsible for settling a person's bills and organizing his or her estate. These parties are sworn in and are also responsible to the courts.

Disputes can easily arise if the family friend or relative who originally had POA starts making decisions about the decedent's assets. People can charge the POA with self-dealing or some other financial impropriety. This is why it is important for the Agent under the POA to stop acting if the Principal passes away and to turn over information to the duly appointed Executor or Administrator of the estate.

Quite often, the people trusted with authority under the powers of attorney become the Executors or Administrators, but those people must follow the requirements mandated by law with regard to the estate and should usually have help from an attorney experienced with probate and estate administration.

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