May 16, 2018

Does a power of attorney lapse in death when the principal passes away?

It is a general principle in our law that no person may act on behalf of another unless he has the necessary authority to do so. Such authorisation is referred to as a Power of Attorney.

A Power of Attorney is a formal document in terms of which someone gives an agent the authority to conclude specific acts on his or her behalf.

Clients often travel abroad and provide agents with a Power of Attorney, which authorises that person to attend to certain personal affairs.

In terms of our law, someone with Power of Attorney may only perform such acts as the person who signed it has the legal capacity to perform. Accordingly, a Power of Attorney is immediately revoked when the person becomes mentally incapacitated, insolvent or passes away. In the case of the death, the reasoning is that the deceased person cannot conclude any juristic acts anymore and so the authority conferred on the agent to perform juristic acts also ceases upon death, irrespective of the wording of the Power of Attorney.

The estate must be reported to the Master of the High Court and an executor will be appointed to administer it. The Power of Attorney will, accordingly, have ceased.

Say, for example, an agreement of sale was entered into by the agent of the Power of Attorney. The agreement is concluded and legally binding. Should the person who gave the Power of Attorney pass away after the signing, the agreement may be enforced and the appointed Executor of the estate will be able to finalise the sale and transfer of the property into the name of the purchaser. If the agreement was signed after date of the passing, the agreement would not be binding.

Raullene Marais

 

 

 

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