Does a Power of Attorney Still Let Me Manage Someone’s Money After They Die?

Introduction

A power of attorney is a legal document authorising someone to act on another person’s behalf in financial or legal matters. It operates only during the principal’s lifetime. In other words, powers become invalid when the principal dies, so the attorney no longer has authority to manage the deceased person’s money under that document.

Specifically, the position in New South Wales (NSW) is that, after the principal’s death, responsibility shifts to the executor named in the Will or an administrator appointed by the court. This overview explains this change, how financial records are handled, which documents to collect and the next steps for family members.

Interactive Tool: Check If Your Power of Attorney Still Works After Death

Power of Attorney and Its Authority

When Does a Power of Attorney Become Invalid?

A general power of attorney authorises someone to manage another person’s financial or legal affairs while they have decision-making capacity. An enduring power of attorney, on the other hand, remains valid even if the principal loses that capacity.

Despite this difference, both become invalid when the principal dies. From that point on, the attorney can no longer use the document to manage the deceased person’s bank accounts, pay bills or make financial decisions on their behalf.

Enduring Powers & Post-Death Authority

Notably, Section 21 of the Powers of Attorney Act 2003 (NSW) (‘Powers of Attorney Act‘) provides that an act performed by an attorney within the scope of the enduring power remains effective even if the principal cannot understand the nature of that act due to mental incapacity at the time.

However, an enduring power of attorney does not extend beyond the principal’s death. Once the principal dies, the document becomes invalid, and any authority to manage their estate must instead arise from a separate legal role.

Who Takes Over From the Deceased’s Attorney?

The Role of the Executor Appointed in a Will

Where a valid Will exists, the executor named in the Will becomes responsible for administering the deceased person’s estate after death. This includes:

• Dealing with the deceased’s property, money, assets and debts; and
• Carrying out the instructions in the Will.

To do so, the executor must apply to the Supreme Court of NSW for a grant of probate and may need assistance from probate and estate administration lawyers with the application and estate administration. Once probate is granted, the executor can formally administer the estate, including:

• Collecting assets;
• Protecting property; and
• Addressing outstanding debts.

Appointment of an Administrator for Intestate Estates

By contrast, if the deceased did not leave a valid Will, the estate is intestate and there is no executor appointed by a Will. Instead, the court may appoint an administrator to manage the deceased person’s estate and carry out the administration process.

Until probate, administration or an order to collect is granted, Section 61 of the Probate and Administration Act 1898 (NSW) (‘Probate and Administration Act‘) provides that the deceased person’s real and personal estate is deemed to be vested in the NSW Trustee. After a grant of administration, the appointed administrator assumes responsibility for managing the estate.

What Should the Attorney Do With Financial Records?

Maintenance & Security of Separate Financial Accounts

Before the principal’s death, the attorney must keep the principal’s money and property separate from the attorney’s own money and property. The attorney must also keep reasonable accounts and records of the principal’s financial dealings, including relevant transactions and property information.

Moreover, these records must be kept securely, as they may be needed after the principal’s death to account for transactions carried out while acting under the power of attorney. They should not be altered, destroyed, or mixed with personal financial documents.

Transfer of Documents to the Executor

Following the principal’s death, the former attorney should provide the financial records and related documents to the executor or administrator responsible for the deceased estate. This information helps identify the deceased’s accounts, property, debts and other financial interests.

In turn, the executor uses those records to find, protect and prepare a list of estate assets and liabilities. Depending on the estate, relevant documents may include:

• Account statements;
• Investment records;
• Property information;
• Loan documents; and
• Records of payments made while the power of attorney operated.

What if the Attorney Made Payments After the Death?

Potential Liability for Payments Made After Death

In these circumstances, an unauthorised payment may need to be reviewed by the executor or administrator as part of the estate administration to determine whether it was lawful and whether any amount must be recovered.

Payments made after the principal’s death cannot generally be authorised under a general or enduring power of attorney, as both cease to have effect upon death. For this reason, once aware of the death, the former attorney must stop using the deceased’s bank accounts and making further transactions under the power.

In addition, under Section 49 of the Powers of Attorney Act, knowingly acting under a terminated power of attorney or exercising suspended authority is an offence punishable by up to five years’ imprisonment.

Restitution to the Estate

As a result, the former attorney may face legal consequences if they acted improperly or without authority. They may also be required to repay money to the estate, particularly where a payment reduced the assets available to cover outstanding debts or distribute to beneficiaries.

Therefore, all relevant financial records should be preserved and provided to the executor or administrator so that each transaction can be assessed and any necessary recovery action considered.

When Should the Family Seek Legal Advice?

Resolution of Disputes Over Unauthorised Transactions

A family member should seek legal advice if there are concerns that the former attorney acted improperly, dishonestly or made payments without authority after the principal’s death. In practice, these concerns may require a review of financial records, bank transactions and the former attorney’s conduct.

Under Section 26 of the Powers of Attorney Act, the NSW Civil and Administrative Tribunal (NCAT) and the Supreme Court are review tribunals. Furthermore, Section 36 of the Powers of Attorney Act empowers a review tribunal to review the making, revocation, operation or effect of a reviewable power of attorney and to order an attorney to provide accounts or other information. 

That said, whether this review process applies will depend on the circumstances of the case, including the nature of the concerns raised, the transactions carried out after the principal’s death and whether there is a need for the former attorney to provide financial records or account for payments made during their appointment.

Transition from Attorney to Executor Duties

Guidance from wills and estate planning lawyers can assist when a former attorney becomes responsible for estate administration in a separate role as executor. As noted above, the authority granted under a power of attorney ends upon the principal’s death, and the executor must understand their distinct legal, financial and taxation responsibilities.

An executor may need to:

• Locate and protect estate assets;
• Identify debts and liabilities;
• Provide financial information;
• Arrange the grant of probate; and
• Manage tax responsibilities.

Documents Checklist & Practical Steps 

Collection of Essential Death Certificates & Estate Documents

As a first step, a family member should collect the documents needed to identify the deceased estate and support the administration process. The checklist should include:

• The original death certificate;
• The original Will;
• Recent bank account and term deposit statements;
• Documents relating to real estate, mortgages and loans; and
• Insurance policies and recent rental statements, where relevant.

Everyday Example of Financial Control Transition

Suppose a family member previously paid household bills using a power of attorney. After the principal’s death, that person must stop acting under the power of attorney because the authority has ended.

The family member should notify banks, financial institutions and government agencies of the death. These organisations can then:

• update their records;
• stop payments or income where required; and
• deal with the executor or administrator once probate or administration is granted.

Conclusion

A power of attorney does not give authority to manage finances after the principal’s death, even when it is enduring. Responsibility moves to the executor named in the Will or an administrator appointed for the estate, with financial records and assets handled through the estate administration process.

With that distinction clear, contact probate and estate administration lawyers at LawBridge for legal guidance about a power of attorney after death in NSW, disputed transactions or the next steps for an executor or administrator. LawBridge’s lawyers can assess the relevant documents and explain the process in clear terms, helping reduce uncertainty while estate responsibilities are being addressed.

Frequently Asked Questions