Estate planning is essential—and a power of attorney (POA) is one of the most important estate planning documents. Yet, many people lack a proper estate plan. A survey cited by the AARP stated that 60% of U.S. adults do not have a will, let alone any other estate planning documents. Through a POA, you can give a trusted person the legal authority that they need to handle some (or all) of your financial and legal affairs.
This raises an important question: does power of attorney end at death? The answer is yes—POA immediately expires upon the death of the principal. At BK Estate Planning Attorneys, we help our clients protect themselves and their family. Here, our Massachusetts estate planning lawyer provides a more comprehensive explanation of powers of attorney, how they work, and what happens when a person passes away.
Power of Attorney (POA): Explained
As a starting point, it is important to understand what a power of attorney is and what can be done with it. Broadly defined, a POA is a legal authorization that allows one party (the agent) to act on behalf of another party (the principal). Through a valid power of attorney, the agent has the authority to handle legal and/or financial affairs for the principal.
What are the Types of Power of Attorney in Massachusetts?
There are actually several different types of powers of attorney that can be authorized in Massachusetts. The specific power of attorney that makes sense for you and your family depends on a number of different factors, including your needs and your objectives. Here is a list of the four key types of POA in Massachusetts:
- General Power of Attorney: A general power of attorney provides the most broad authority to the agent. It effectively allows him or her to act as the principal’s “attorney in fact.” It can take immediate effect and last until it is revoked, the principal becomes incapacitated, or the principal dies. If you have specific questions about general POA, our Massachusetts estate planning lawyer can help.
- Durable Power of Attorney: Under Massachusetts law (Section 5-501), a durable power of attorney is one that continues through the principal’s incapacity. In other ways, it is similar to a general POA. The central difference is that it can last beyond incapacity so that the principal has protection during this time. A durable POA is generally a better estate planning option than a general POA, though there are exceptions.
- Limited Power of Attorney: A limited POA is a specialized type of power of attorney that is restricted in one of more ways. For example, the agent who receives limited POA may only have the authority to act as an “attorney in fact” for a specific purpose. Limited POA can also be restricted in time. For example, it could be effective for as little as a single day.
- Springing Power of Attorney: A springing power of attorney only takes effect when the principal becomes incapacitated. It is another very common estate planning option. For example, a person could grant springing POA to their adult child. That POA would not be effective until and unless the principal—the person who granted it—became incapacitated or otherwise legally incompetent. If you need help with a springing POA, reach out to our Massachusetts estate planning attorney for guidance.
When Does Power of Attorney End in Massachusetts?
In Massachusetts, power of attorney can end in a number of different circumstances. There are actually five different common scenarios which could result in the end of a power of attorney:
- Limited by Design: First, POA can end because it is limited in duration. For example, a limited power of attorney may, by structure of the document, only last for a pre-specified period of time.
- Ended Due to Incapacity: Next, a non-durable POA can end because of the incapacity or declared mental incompleteness of the principal. Unlike a durable POA, a general POA does not remain in effect once the principal loses their capacity.
- Revoked by the Principal: A power of attorney can also be revoked by the principal. As long as the person who created the power of attorney is still of sound mind, they have the right to revoke. However, if they lose their capacity, they will also lose their right to modify a power of attorney document.
- Eliminated By a Court: Unfortunately, there are cases in which people abuse the power of attorney. In Massachusetts, a court could end POA if it is determined that the agent engaged in misconduct or otherwise abused their legal capacity.
- Death: Finally, the death of the principal always ends the power of attorney. POA is an estate planning tool designed to help a person during the course of their life. Once their life ends, a power of attorney is no longer an effective legal document.
What Happens to a POA After a Person Passes Away?
Once a person passes away in Massachusetts, any power of attorney that they granted—whether general, durable, limited, or springing—is extinguished. There is no more a power of attorney. The person who held their POA does not have the right to handle their decedent’s financial or legal affairs—at least they do not if they are trying to do so using power of attorney.
The Bottom Line: Massachusetts law is clear. Power of attorney ends at death.
Can You Still Use the Power of Attorney for Anything After a Death?
No. There are no exceptions to the Massachusetts law on power of attorney and death. When a person dies in Massachusetts, it does not matter that you had their POA or that they were instructed to take a certain action, you cannot do anything with POA. You need to handle their estate in the proper legal manner. Failure to do so could cause serious problems for you and your family.
What is the Proper Way to Handle a Loved One’s Assets After Their Death?
Knowing that power of attorney ends at death in Massachusetts, you may be wondering: What is the appropriate way to handle your loved one’s financial and legal affairs after their death? After all, there may still be bills to pay or legal/financial matters that need to be resolved. The answer is that after someone dies it is no longer an “estate planning” matter, it is an “estate administration” matter. You will likely need to take their estate through probate. As explained by the Commonwealth of Massachusetts, probate is “the process of transferring property and ownership after someone has died.” Here are three key things to know about handling assets:
- Probate Should be Initiated if Required: The first thing that needs to be determined is whether or not your loved one had a valid will. If there is a will, then the document needs to be submitted to the proper probate court. If there is no will, then they have passed away intestate. Probate may still be required. Everyone should have a will. It is one way to protect valuable assets as part of a comprehensive estate plan.
- An Executor or Estate Administrator Will be Appointed: When a person passes away, their agent (person with power of attorney) is no longer responsible or empowered to handle their affairs. Instead, the executor as named in their will or the estate administrator as appointed by a probate court takes over this responsibility. Notably, the executor can be the same person that had their power of attorney. This is not uncommon at all. However, you need to be appointed an executor or an estate administrator before taking any action.
- Executor/Estate Administration Must Follow the Estate Plan: Depending on how exactly the document is structured, the person with power of attorney may have some discretion for managing the legal and financial affairs of the principal. They need to protect their best interests. In general, executors and estate administrators have less discretion. They are required to follow the estate plan. If there is no estate plan, then they must distribute assets in accordance with the Massachusetts intestacy laws.
How Does Power of Attorney (POA) Affect a Will?
Power of attorney does not impact a will—at least not directly. A person who holds POA in Massachusetts cannot revise the principal’s will. You cannot use power of attorney to change a valid will either before or after a person’s death. Once a person passes away, power of attorney automatically expires and their estate will be managed in accordance with the instructions found within their will. If you have questions about wills and probate, please do not hesitate to contact our Massachusetts probate lawyer for help.
Can Power of Attorney Still be Used if the Decedent Lacked a Will?
No. Every adult in Massachusetts should have a will. If you do not have one, you should update your estate plan. When a person dies without a will, it can create confusion for their family and friends. That being said, a power of attorney cannot be used after a person’s death even if they failed to create a will. Power of attorney has no validity after the principal’s death and it cannot be used to create or alter a will.
Instead, probate without a will may be required. The person who held power of attorney may be able to get appointed as the estate administrator by a Massachusetts court. Whether or not this will occur depends on a wide variety of different factors, including whether or not anyone else is seeking to be appointed and the relationship between the parties. The probate court will determine who is best suited to act as the estate administration if no instructions have been left by the decedent.
Is the Executor of the Will Similar to Power of Attorney?
There are both differences and similarities between the executor of the will and the agency who holds power of attorney. The key similarity is that both are empowered to handle financial/legal matters for the person who named them. Still, there are major differences. A power of attorney is empowered to act on behalf of a person who is alive. The executor of the will helps to administer an estate in accordance with the will and other estate planning documents after someone dies.
Why Choose BK Estate Planning Attorneys for a Power of Attorney Case?
Estate planning can be complicated. If you have a lot of questions about how an estate planning matter—such as the power of attorney—works, you are far from alone. At BK Estate Planning Attorneys, we help people and families secure their future. When you reach out to our team, you will have an opportunity to consult with a Massachusetts estate planning lawyer who is prepared to:
- Listen to your concerns, answer questions, and explain your options;
- Help you gather the documents and records that you need to proceed;
- Handle power of attorney paperwork and other estate planning/administration issues; and
- Take whatever legal action is required to help protect your rights and interests.
At BK Estate Planning Attorneys, our Massachusetts estate planning lawyers have the professional experience that you can trust to find solutions. We know well that all estate planning, estate administration, and probate issues are unique, but we are devoted to providing truly personalized guidance and support to our clients.
If you have any questions about powers of attorney (POAs), we are here as a legal resource. Contact us today to schedule a confidential consultation with an experienced attorney.