How Can a POA Agent Manage Bills for an Incapacitated or Deceased Person?

To manage bills for an incapacitated or deceased person, a Power of Attorney (POA) agent must navigate a complex landscape of laws, legal documents, and bank security protocols. Understanding the different scenarios and the necessary steps can help avoid complications and ensure proper management of finances.

Deceased Person

Managing bills for a deceased person can be particularly challenging. In jurisdictions like the United States, the POA automatically terminates upon the death of the principal (the person who granted the power). Instead, an executor or administrator appointed by the probate court assumes control of the deceased's estate. This legal representative will be responsible for managing the deceased's financial affairs, including paying outstanding bills. The executor is required to prove the authority by providing documentation such as legal papers, a copy of the will, and identification of the heirs. Banks may require a death certificate and legal documents before releasing funds.

Incapacitated Person

For an incapacitated person, the process is somewhat different. An incapacitated person lacks the mental capacity to manage their own affairs and requires the assistance of a POA who has been granted durable power of attorney (POA). This means that even if the person becomes incapacitated, the POA's authority remains in effect. To legally and safely manage the incapacitated person's financial affairs, the POA must:

Obtain the necessary bank account information. Provide a durable power of attorney document to the bank. Present a medical certification from two doctors stating that the person is incapacitated.

While a court order is usually not required for newly incapacitated individuals, the POA must have up-to-date and officially recognized documents to operate. Once these documents are in place, the POA can authorize payments on the incapacitated person's behalf. However, the bank may ask for additional proof, such as recent bank statements or checkbooks, to verify the details of the account.

Managing Funds Before and After Incapacity

Regardless of the person's current capacity, managing funds effectively requires detailed documentation and adherence to legal procedures. For a living, incapacitated person, the POA agent can typically handle bill payments with the necessary bank account information. If the incapacitated person cannot sign documents due to health issues but is still conscious, a thumbprint may be acceptable, provided it is witnessed and documented.

Upon the death of the incapacitated person, if the POA was not already active in managing the estate, the legal process becomes more involved. Executors or administrators must ensure that there are no outstanding bills, and the necessary documentation is provided to the bank. If heirs need to withdraw funds, they must submit all required documentation, and in some cases, a letter of waiver from higher management may be necessary, provided they have all the essential proof such as hospital bills and estate taxes.

It is always advisable to seek legal advice when dealing with POAs and estate management to ensure compliance with all relevant laws and regulations.

Keywords: Power of Attorney, Incapacitated Person, Deceased Estates