A power of attorney (POA) is an important legal document that allows someone to designate an agent to manage their financial, healthcare, and other affairs if they become incapacitated. But what happens when the principal who created the POA passes away? Does the agent still have the authority to act under the POA?
In Colorado and most other states, a POA is generally no longer valid after the death of the principal. However, there are some exceptions and specifics to be aware of when it comes to POA and death.
Purpose and Function of a Durable POA
A “durable” POA continues to remain in effect even if the principal later becomes incapacitated. This is an important estate planning tool as it allows the appointed agent to keep managing the principal’s affairs smoothly.
Under Colorado’s POA laws, to create a durable POA the document must contain language stating that the POA “shall not be affected by disability of the principal.” As long as the principal is alive, the agent may continue acting per the POA even if the principal is later deemed incapacitated.
What Happens to the Power of Attorney After Death?
When the principal dies, the durable power of attorney document becomes null and void. The agent’s legal authority to act on the principal’s behalf ends immediately. Any actions taken by the agent after the principal’s death would be considered invalid and potentially illegal.
If the principal had a living trust, the successor trustee named in the trust document would take over the management and distribution of the trust assets according to the trust’s terms. If there is no living trust, the estate would go through the probate process, and the executor named in the will or the court-appointed personal representative would handle the distribution of assets according to the will or state laws.
It’s important to note that while a power of attorney expires upon the principal’s death, the agent may still have certain responsibilities or obligations to fulfill, such as providing an accounting of their actions or transferring any remaining assets to the executor or personal representative.
Transferring Authority After Death
So if a POA expires upon death, how are the deceased person’s affairs and estate handled? Typically, the authority and decision-making duties will pass to:
- The Executor Named in a Will – If the deceased left a last will and testament, the executor named in the will has legal authority to act on behalf of the estate. They are responsible for carrying out the distribution of assets according to the will.
- Court-Appointed Administrator – If there is no will, the probate court will appoint an administrator to oversee settling the estate. This may be a surviving spouse, adult child, or another eligible individual.
In either scenario, the deceased’s property must go through probate court to legally transfer ownership and titles to heirs. A POA agent no longer has authority after death and cannot bypass formal probate.
Exceptions to Expired POA
While most POAs terminate upon death, there are a few exceptions where an agent may retain limited authority:
- If Specifically Stated – A POA document may contain special provisions allowing the agent to retain powers over certain matters for a defined period after the principal dies. This needs to be explicitly stated in the document.
- Wrapping Up Transactions – An agent may temporarily continue actions needed to complete transactions that were already set in motion before the principal’s death. For example, closing an open real estate sale.
- Court Approval – A judge may allow the agent to temporarily act on a specific matter involving the deceased if no executor/administrator has been appointed yet. But there must be approval.
In any of these situations, the agent’s authorization applies only for limited circumstances and durations after death. It is not an indefinite extension of their powers.
Preventing Abuse of Power of Attorney
One of the concerns surrounding power of attorney documents is the potential for abuse or misuse of authority by the agent. To prevent this, it’s essential to choose an agent you trust implicitly and to review and update your power of attorney regularly.
Additionally, you can include specific limitations or instructions in the power of attorney document to restrict the agent’s authority or require oversight or approval for certain actions. It’s also a good idea to name a successor agent in case your primary agent becomes unable or unwilling to serve.
Work with a Colorado Springs estate planning lawyer to Protect Your Wishes
At Hammond Law Group, our dedicated Colorado Springs estate planning lawyers have over 40 years of combined experience helping clients protect their legacies. We offer a range of services, including our Legacy Protection Plan, which provides ongoing support and annual reviews to ensure your estate plan remains up-to-date with your changing needs and circumstances.
Don’t leave your family’s future to chance. Contact Hammond Law Group today to schedule a consultation and take the first step toward securing your legacy. Call us at (719) 520-1474 or visit our website at https://coloradoestateplan.com/ to learn more about our services and attend one of our informative workshops.
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