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If your relatives encourage power of attorney over their financial matters, you will be allowed to make decisions for them and act on their behalf. But what happens when your loved one dies?
Reader Debbie writes that her stepmother was the primary cardholder of her credit card account. Her health failed and she had a late bill, so she went to the bank with her son and added him as the second signer of her account. Her mother-in-law later died and after the family informed the bank of their death, they were informed that the bank had cancelled their card.
According to Debbie, “We had lots of notices in the last two days. No payments were made for her car. When my husband called, they said they canceled the card because she was primary because she was dead. We pay back the card every month.”
Use Debbie’s situation as an example and take a closer look at how the power of attorney affects the outstanding credit card of your loved one.
What is the power of attorney authority?
Essentially, when someone advises you to a power of attorney, they allow you to act on your behalf. For example, you can buy and sell real estate in your name or make other financial decisions for them. Once a person is neutralized, you can set it up so that you are granted responsibility for your authority.
You can also set it to enable power of attorney immediately when the privileges are granted. And the power of durable authority means that the power of authority is effective even if the commander becomes incapacitated or disabled. Usually, grantors assign such authority to allow trustworthy individuals, such as family and friends, to make decisions when they cannot.
The death of a cardholder ends the power of approval of a power of attorney
When a violator of authority’s power dies, the power of authority ends. It no longer has legal authority. The bank must notify you that you can close the account of the dead cardholder.
Because the primary cardholder’s account is closed, the card is not invalid and cannot be used by authorized users. Authorized users are not responsible for credit card liabilities either. If you have recurring payments set up for this account, you will need to call the merchant and ask them to stop charging this credit card.
You can also call the Credit Reporting Office and ask the deceased to put a credit freeze so that fraudulent individuals do not give credit in the name of the deceased.
After doing this, you will need to cancel the deceased family’s credit card account. Your credit card will not be automatically cancelled when someone dies.
If you are a joint cardholder, the card remains active, but you must notify the issuer of the death. You will continue to be liable for your card liability. And the bank may want to reject your finances to ensure you qualify for the card yourself.
If you are the spouse of a dead person and live in a state that has community property laws, even if you are not a joint account owner, you may be responsible for repaying your debts.
Conclusion
Agents with a power of attorney can take legal and financial actions on behalf of the principal. People tend to have this type of arrangement, so they can make decisions on behalf of trustworthy individuals in case they are physically disabled or incompetent. However, this authority ends upon the death of the grantor.
Debbie, the power of authority over the problems of your husband’s mother ended with her death. He does not say that she was the primary cardholder after the bank closed her mother’s credit card account. This depends on the card issuer’s policy regarding how you handle the rewards accumulated in your account. Let anyone who continues to charge her card that she has passed away, including her car loan lender. The lender should take necessary measures depending on the terms of the car loan and stop charging your credit card.
