What Would ATI Do: The Case of the Expired POA

What Would ATI Do? is a column in which we discuss a problem we've encountered and how we solved it. Some of these topics you may be familiar with. Others may be brand new information. Either way, we hope to provide you with a better understanding of what to do when you encounter one of those rare 'What If?' situations! It's told in a story format and of course the names have been changed and the situations may be exaggerated somewhat to provide more information.

The Case of the Expired POA

John and Martha Pivens had a piece of property which they owned and lived in for the last thirty years. Three years ago they gave their son, Milton, power of attorney. Power of attorney is an instrument in writing in which one person (the principal), authorizes another (the attorney in fact) to act for him in the specific actions described in the instrument. In our case, this gave Milton the authority to buy and sell the Pivens's property. Unfortunately, last year Milton's mother passed away and two months later, so did his father. After making all the necessary arrangements, Milton started to go through the things in their house and contacted a Realtor to put the property up for sale.

A few weeks later, Milton had a signed contract and was ready to order title insurance. He signed the real estate contract "John and Martha Pivens, POA" and his real estate agent turned it over to proceed with the title work. Abstracts completed our initial search showing John and Martha Pivens as the owners. Since the Pivens died out of state there was no date of death of record in the property's county. We assumed the owners were alive and the son was just signing with his power of attorney.

The day of closing, Milton Pivens comes to the closing table with his only brother, Ted. As they are chatting before closing Milton mentions how pleased he was that he sold this property so quickly after his parents death. This immediately puts up a red flag for the closer who explains a very important lesson about a power of attorney: All power of attorney documents expire with the death of the principal individual.

With this new information, we went from having John and Martha Pivens selling the property to all the heirs at law of John and Martha Pivens.

So what would ATI do?

This problem was fairly simple to solve. Our closer immediately contacted an attorney to prepare a document known as an Affidavit of Heirship. Since there were only two brothers, both present at closing, they were able to sign the affidavit stating they were the only possible heirs of John and Martha Pivens. Our closer was then free to proceed with the closing, as normal.

The important lesson is all power of attorney documents expire with the death of the principal. You cannot sign on someone's behalf with a power of attorney document once they are deceased. If you are a legitimate heir of the individual who has passed away, you will sign as an heir, but not as a power of attorney.