Introduction
Wondering if a Power of Attorney is still valid after death? No, but there are some things you can do to make sure you are still covered, even after you pass away.
In this article, we’ll delve into the intricacies of the validity of a power of attorney, addressing common concerns and providing clarity on this important legal document.
What is a Power of Attorney?
A power of attorney is a legal document that allows you to grant someone else (called an attorney) the authority to make decisions about your legal and financial affairs on your behalf.
Why do you need a power of attorney? Because, as outsiders, we don’t know who we should be listening to when it comes to managing your affairs.
Should we listen to your spouse you married two weeks ago in Vegas? One of your three kids? Your sister? It might seem obvious to you because you know who your people are. But outsiders do not know who in your family we should trust when it comes to your affairs. Imagine that your gambling addict child walked into your bank. They say to the teller “mom asked me to pay some bills for her, please give me all the money in her account and close it out.” You wouldn’t want the bank to just do that, would you?
So we can’t tell who we should trust anymore. It’s therefore not a given that your family will be able to deal with your legal or financial affairs on your behalf without a power of attorney. The law doesn’t work that way.
Who makes a Power of Attorney?
We call the person who makes a power of attorney an adult. The person you name as your helper is called the attorney. You make a power of attorney for use while you are alive. A power of attorney is not valid after death.
You can make a power of attorney if you are 19 years or older, and capable. You need to be able to understand:
- the property you have, and its approximate value;
- the obligations you owe to your dependants;
- that your attorney will be able to deal with your money on your behalf
- that your attorney could mismanage or steal your asets
- that you can revoke the power of attorney
What is an enduring power of attorney?
An enduring power of attorney is one kind of power of attorney.
Enduring powers of attorney are documents that work even if you become incapacitated. In other words, the appointment doesn’t fail simply because you get Alzheimer’s or have some other medical issue that leaves you incapable.
This is the most commonly used power of attorney. Most people want their family to be able to help with their finances after they have had a stroke or became incapable. But remember, a power of attorney is only used while you are alive. Powers of attorney are not valid after death.
Client story
Jane is a 60 year old retiree. She recently had to help her mother deal with her finances, and it was a mess. Her mother hadn’t made any of the important documents needed to let Jane help her with her affairs.
Jane spent a lot of time arguing with banks and investment advisors about how to look after her mom’s money, and the Land Title Office wouldn’t even start a conversation with her at all without a Power of Attorney. She couldn’t forward her mother’s mail, and she couldn’t sell her mother’s car.
Jane wants to make sure that her daughter won’t have the same problems she had looking after her mother’s affairs, so she made an enduring Power of Attorney.
When is a Power of Attorney Valid?
In British Columbia, the Power of Attorney Act sets out when a power of attorney is valid, and when it ends. It’s usually valid when it has been signed by both the adult who made the power of Attorney, and also by the attorney. In some cases, a power of attorney might have a special effective date in it – a specific date when the power of attorney becomes effective.
The adult must have legal capacity at the time of signing the power of attorney. The document must be properly drafted and executed in accordance with BC’s Power of Attorney Act.
It’s not necessary for an attorney to accept their appointment when the power of attorney is made. In fact, we often recommend that the attorney doesn’t accept their appointment until you need them to actually start acting for you. There are a few reasons for this, including privacy and the difficulty of meeting the formal record-keeping requirements.
Is a BC Power of Attorney Valid in Other Provinces or Countries?
While a BC POA may be recognized in some jurisdictions outside the province, it’s essential to understand its limitations. Different regions may have varying laws and requirements regarding POAs, which could affect their validity and enforceability. For example, Sarah, a 65-year-old retiree who frequently travels to the United States, decides to appoint her son as her attorney. Despite having a BC POA in place, Sarah learns that certain US states may require additional documentation or procedures for her son to act on her behalf. Seeking legal advice can help individuals like Sarah navigate these complexities and ensure their POA remains effective across different jurisdictions.
Is a Power of Attorney valid after death?
No. A power of attorney terminates upon the adult’s death. Your attorney must stop acting for you when you die, and hand over a set of accounts to your executor, so they can then start managing your estate on behalf of your beneficiaries.
The executor of your Will takes over from your attorney after you have died.
If you have not made a Will, then someone in your family will need to volunteer to manage your estate for you. Trying to sort out someone’s estate without a Will can be very difficult, and can result in lots of fighting.
What are some other reasons why this authority might be terminated?
Here are some other reasons why a power of attorney might be terminated.
- if the adult who made the power of attorney revokes it
- if the adult appointed their spouse as their attorney, and they separate
- if there are terms in the power of attorney document that set out specific termination events (eg. this power of attorney terminates when I have sold my home)
- if there the court terminates the power of attorney (there could be several reasons the court does this)
- the attorney has been convicted of an offense in which they have harmed their adult
Client Story
Jennie and John were married. They appointed each other as their attorney. They didn’t appoint anyone else as a back-up attorney.
John died of a sudden heart attack when he was in his early 60’s. The power of attorney John made appointing Jennie became invalid when he died. Jennie could no longer sign for him as his attorney, but she was also named as his executor in his Will.
Jennie managed John’s estate using his Will after he died..
Key Takeaways
- a power of attorney grants someone else the authority to make legal and financial decisions on your behalf.
- your power of attorney is valid when you and your attorney have both signed it (unless you have chosen a different effective date)
- powers of attorney end with the death of the adult who made them
- your Will takes over from the date of your death
Need a power of attorney? Contact us – we’d be happy to help you arrange it.