When Does Power of Attorney End?

A power of attorney (POA) is a crucial legal document that allows one individual, the agent, to act on behalf of another, the principal, in personal, business, and health matters. Essentially, the agent functions as the executor of the principal's wishes. When does power of attorney terminate? Does a POA expire when the principal becomes unable to make decisions for the agent? What are the common types of POAs? These are the questions the following guide aims to answer. 

Before moving on to the question, When does a power of attorney expire? let's discuss what a POA is. Confirmed via a notarized, official document, a power of attorney empowers an agent to represent the principal in a variety of financial, business, and personal matters, except for court representation. However, it's important to note that the extent of this empowered authority can greatly depend on the specifics ironed out in the power of attorney template.

A power of attorney is a legal confirmation or authorization that allows one person to act on behalf of another person in personal, business, and health matters. A power of attorney must be confirmed in an official document or letter of some sort that was signed and notarized. With this document, the person who has power of attorney can represent the principal in most financial, business, and personal matters. A power of attorney does not permit the person to represent the principal in court.

Depending on the details of the agreement, the person may have the power to make important decisions about the principal's property, assets, finances, business, and even life. As such, if the principal is in critical condition and cannot make decisions for themselves anymore, the person with the "power of attorney for healthcare" can decide on the medical care the principal will receive (if it was so stated in the contract, of course). These special health-related powers of attorney are referred to as Durable Powers of Attorney or Living Wills. Most of the time, a power of attorney is used when the principal cannot be physically present to make decisions or sign documents.

Keep on reading to find out about the different types of power of attorney.

Different types of powers of attorney may allow the attorney-in-fact to make decisions in different spheres of the principal's life. While some may give you the limited power to sign one document or make one transaction on the person's behalf, others may allow the agent to control the person's medical care, property, and finances. Here are the main types of power of attorney:

General power of attorney gives the agent the right to act on behalf of the principal in all matters except healthcare. They can open bank accounts, make transactions, buy or sell assets, and more. The contract will stay in effect for as long as the principal is alive or until they choose to terminate it.

A limited power of attorney is limited to a certain activity or area of life. The exact scope of activities should be outlined in the agreement. For example, the agent may be allowed to manipulate one particular property belonging to the principal. That may involve selling it, renting it out, reconstructing it, and more. Similarly, the agent may only have the right to sell the property according to the guidelines outlined in the power of attorney document.

In this case, the agent can and should continue to act on behalf of the principal in the case of the principal's incapacitation. Usually, such contracts are signed with the expectation that the principal will not be able to take care of their own affairs and will need someone to do it for them.

So, when does power of attorney end? There are several reasons for ending a power of attorney. Certain circumstances can cause that to happen or prevent it from happening. Here are some of the most common ones that will help you to understand when a power of attorney expires:

An ordinary power of attorney ends when the principal dies. The termination date should coincide with the date of the principal's death. However, that's not always the case. In some circumstances, the agent may continue to act on behalf of the principal for a short time after their passing. Any actions taken by the agent before learning about the principal's death will also be considered legally binding as long as they were done with the principal's best interest at heart.

Does a power of attorney expire when the principal is unable to guide the agent's decisions? Yes, the general power of attorney is legally valid for as long as the principal can make decisions for the agent. As soon as they cannot do it, the agent's authority should no longer be recognized. There are exceptions to that as well, of course. As such, if the power of attorney is durable, the agent may continue to make decisions on behalf of the principal. As with the principal's passing, any decisions made in good faith before learning about the incapacitation will hold up in court. 

If the principal is alive and can make decisions for the agent, there are still cases when a POA can lose its legal power. When does a POA end in this case? This applies in a case when the power of attorney was granted to complete a specific task. For example, let's say the agent's responsibilities and financial power were limited to selling a piece of the principal's real estate. Once the task is complete, the sale contracts have been signed, the bills have been paid, and the agent no longer has a task remaining, the POA is automatically terminated. The scope of the agent's obligations will always be outlined in the POA document. 

When does a POA expire automatically? It happens when the principal revokes the power of attorney. If they choose to do so, they need to write a formal letter informing the agent-in-fact about their decision to revoke their power of attorney. This process is relatively easy and quick. If the principal has a legal guardian, they can deliver the official notice on their behalf.

Does POA expire over the course of time? Yes, some powers of attorney contracts have a time limit. It's rarer than you may think, but it happens. If that's the case, a power of attorney ends automatically as soon as that day comes. 

This, of course, works only if the agent and the principal were in a legal marriage relationship. When they decide to terminate their partnership by means of getting a divorce, the agent loses their power of attorney. There is an exception to that rule, and that is only if the contract states that the power of attorney is not affected by divorce. 

You might wonder, does power of attorney expire when someone dies? The short answer is yes, though there are exceptions to every rule. As we already know, a power of attorney automatically terminates if the principal dies. A power of attorney cannot survive beyond when the agent becomes aware of the principal's death. Once the principal dies, only the executor of their estate may act on behalf of the deceased's estate and beneficiaries. It is the executor's duty to get in touch with all the beneficiaries and the probate litigation lawyer in the settling of the will of the decedent.

If, on the other hand, it is the agent-in-fact who passes away, when does POA end? The answer is immediately. Unless the contract provides a backup or successor power of attorney to replace the one that passed away, the contract is automatically terminated.

To prevent any potential issues, it's recommended to always have a legally binding will. You can find templates in your state, for instance, will template for Illinois, and get your ready-to-go will in a few clicks. For legal needs such as creating a legally binding will, you may use a template provider that offers a range of other business-related templates.  

So, when does the power of attorney end? To summarize the article, here are some things you need to remember about POA and its termination: