Can the actions of the Power of Attorney be reversed after death?

Recently on our legal forum a user asked, “If I have been given power of attorney to deal with my father’s financial affairs can the actions I take as the POA be reversed after my father dies?”

The power of attorney or the attorney-in-fact allows someone to act as the legal agent for another person for a specified period and purpose.

The type of power of attorney can vary. For example, some individuals may be given limited power of attorney, which allows them the ability to act on their principal’s behalf for a specified time period to complete specific actions (e.g., purchase a home). Durable power of attorney allows someone to act on someone else’s behalf when they become incapacitated and cannot make their own decisions. General power of attorney, however, allows someone to act on someone else’s behalf whether or not they are incapacitated.

Regardless of the type of power assigned, however, the powers are terminated at the time of the principal’s death.

What powers do I have as the power of attorney?

Now, as mentioned above, there are various types of power of attorneys. Your responsibilities and powers will vary by type. But general actions a power of attorney may be able to take can include paying the bills, managing the investments, and directing the medical care for the principal.

As you can see, as the power of attorney you have very important responsibilities. For example, if you have durable power of attorney over healthcare matters you may have the right to follow your principal’s health care declaration and decide when medical care should be approved or denied.

With this in mind, it’s very important to understand your roles and responsibilities, understand the wishes of the individual you are protecting, and not do anything which is irresponsible or illegal.

Can my actions as the power of attorney be reversed?

Power of attorney gives the agent a significant amount of power; power which may be abused if the attorney makes decisions which do not benefit the principal. Specifically, the power of attorney may have complete control of the principal’s finances, allowing them to steal or embezzle funds.

The power of attorney may also make specific investments which do not benefit the principal, or they may open bank accounts, purchase investment products, use the principal’s credit cards, or commit welfare or tax fraud.

Finally, they also may update the beneficiary designations for assets, allowing them to determine who will inherit property at the time of the principal’s death.

If you have committed any of the above actions or any action which is for your own benefit rather than for the principal’s benefit, not only can it be reversed, you may be charged with a crime under state and federal laws.

How do I know if power of attorney abuse has occurred?

From your question it’s not clear exactly what type of concerns you have regarding your father’s care. If you have been assigned power of attorney and someone has questioned the decisions you are making for your father there are steps you can take to ensure that your actions are legal and beyond reproach. Consider taking the following steps:

-Keep a detailed record of everything you do and be ready to provide a complete accounting on an annual basis.
-Make sure you have completed a thorough review of all of the principal’s important documents.
-Keep an open dialogue with the principal’s attorney, financial planner and accountant.
-Keep contact with other relatives who are entitled to receive an accounting of your actions.
-Keep meticulous records for income tax purposes.
-Do not hesitate to seek the advice of an accountant or lawyer.
-Never give any gifts from the principal’s property, unless specifically authorized to do so.

Bottom Line:

If the decisions you make are in the best interest of the principal and you do not benefit from the appointment in any way, it’s unlikely that your decisions will be questioned. If you breach your duties and commit fraud or change the principal’s will or any other testamentary designation, including the beneficiaries for insurance policies, not only can you expect someone to question and challenge your decisions, in some cases, you may be charged with a crime.