What happens to a power of attorney when the person giving it dies?

A person who signs a power of attorney document giving authority to someone else is called a donor. The donor uses the power of attorney to name someone to make decisions when the donor is no longer able to do that for himself of herself.

The power of attorney document is only in effect while the donor is alive. As soon as the donor dies, the power of attorney is revoked. The person named as executor under the donor's will takes over as being the person in charge. If there is no will, the power of attorney still comes to a stop, even if it means that there isn't anyone in charge until the court appoints an administrator.

A person looking after a donor's money or property is obligated to account to the donor's executor if the donor dies. This means that the person acting under the power of attorney has to give a full accounting of all the financial steps he or she took with the donor's money. This is why someone acting under a power of attorney should not only keep detailed financial records, but should also keep copies of receipts, cancelled cheques and other paperwork that backs up his recollection.

If a person acting under the power of attorney was negligent or fraudulent, this is often discovered at the time the accounting must be produced (a power of attorney who steadfastly refuses to account for his actions is a red flag).