Durable Power of Attorneys are not effective after death
A common area of confusion is Durable Power of Attorneys. It seems that most people know that these are effective during a person’s lifetime to assist with financial and legal affairs. What is less commonly understood is that the legal effectiveness of this document stops at the moment of death.
For the unknowing, what often happens is that they use the Power of Attorney for mom or dad during their lifetime to help them with paying bills and getting money out of the bank. Then mom or dad dies. They continue to go to the bank and get money out of the bank or write checks. No one says anything to them – so they assume that it is okay.
It isn’t until they attempt to go to close out a bank account or go to sell the real property that they are stopped. They state that mom/dad has died and they are taking care of business. They present the Power of Attorney and are told that it is not effective anymore and that they need a Letter of Authority from the Probate Court.
This is when they come to my office, upset and confused. They don’t understand why the bank or real estate agent would not accept the Power of Attorney when they had been using it for so long.
They are usually quite shocked when I tell them that the bank or broker was correct and that they should have gone to Probate Court immediately after mom/dad’s death and that it really was not proper to have been writing checks on their deceased parent’s checking account relying on the Power of Attorney.
Powers of Attorney are effective during our lifetime only. Once we have passed away, matters shift. In order to do business and banking thereafter, it is a matter that is governed by our Wills or Trusts.