I am not sure who to blame for this. Perhaps it is the fault of lawyers who fail to properly advise clients when a power of attorney is signed. Or, maybe what I am seeing is the result of the information age where forms and documents are readily available and people do not realize they don’t have all of the information. Regardless of the cause, it’s happening. What’s happening? Folks continuing to act under the guise of a power of attorney when the principal is dead. Whoops? Yeah, that’s a big, big whoops.
A power of attorney is a document signed by a principal empowering an “attorney-in-fact” to act on the principal’s behalf. The document itself delineates the duties and powers of the appointed “attorney-in-fact.” The foundation of this legal relationship is based upon agency law. In fact, let’s look at Section 1.01 of the Restatement Third (literally, this is rule 1):
Agency is the fiduciary relationship that arises when one person (a “principal”) manifests assent to another person (an “agent”) that the agent shall act on the principal’s behalf and subject to the principal’s control, and the agent manifests assent or otherwise consents so to act.
In layman’s term, for the relationship to exist, you need an agent (the attorney-in-fact) to act on behalf of and subject to the control of the principal.
So this brings us back to step one. If the principal is dead (unable to control the agent), how could an agent possibly act under the authority of a power of attorney? The person can’t. He or she simply doesn’t know any better. And, depending upon what he or she has done, there may be some liability there.
