DPOA Question

[JM1975]

What is the name of your state? Colorado
My brother and I are DPOA for my father who is in memory care with severe dementia. Mom passed away 2 years ago. My brother is also executor of my dad's will. We have access to his brokerage and cash accounts to pay his bills and medical expenses not covered by Medicare or his long term insurance. We've also been trying to sell their house and have had to make some investment on updating and repairs to the house. If dad were to pass away, which could be very soon, can we continue to use his assets to complete repairs on the house?

 

[adjusterjack]

If dad were to pass away, which could be very soon, can we continue to use his assets to complete repairs on the house?

When Dad passes away, the DPOA passes with him.

Your brother will have to go to Probate Court and get court acknowledgement that he is executor (representative of the estate). The papers are often called "letters testamentary" and will authorize him to continue the repairs and sale of the house and its contents.

If your Dad planned his estate property, the brokerage and cash accounts should have listed beneficiaries. If so, those assets go to the beneficiaries immediately upon death and do not have to be probated.

Back to the house for a moment. If your Dad had executed and recorded a Colorado beneficiary (transfer on death deed) then the house ownership would automatically transfer to the beneficiaries.

If there is a car involved, Colorado also allowed for transfer on death. If that wasn't done, this is the process:

What to do when a loved one dies | Department of Revenue - Motor Vehicle

Even if everything is transfer on death, your brother may still have to go to court to get his papers if somebody demands them in order to allow him access.

 

[zddoodah]

The estate may use estate assets to repair estate assets. The person in charge of the estate (the executor) owes fiduciary duties to the beneficiaries of the estate. In your situation, the executor must determine whether using estate assets (e.g., cash or other liquid assets) to repair/improve the house is prudent in light of all relevant facts and circumstances. When your father dies (there is no "if"), your brother should retain the services of a local probate attorney to probate the estate properly and to advise him about his duties as executor.

 

[JM1975]

The estate may use estate assets to repair estate assets. The person in charge of the estate (the executor) owes fiduciary duties to the beneficiaries of the estate. In your situation, the executor must determine whether using estate assets (e.g., cash or other liquid assets) to repair/improve the house is prudent in light of all relevant facts and circumstances. When your father dies (there is no "if"), your brother should retain the services of a local probate attorney to probate the estate properly and to advise him about his duties as executor.

We do plan on retaining a local probate attorney. We were using my parents estate lawyer, but he has retired.
The question I have is this: When my dad passes, will the executor (who is the current DPOA and managing the house repairs) be able to continue using estate assets to repair estate assets without interruption?

 

[Zigner]

We do plan on retaining a local probate attorney. We were using my parents estate lawyer, but he has retired.
The question I have is this: When my dad passes, will the executor (who is the current DPOA and managing the house repairs) be able to continue using estate assets to repair estate assets without interruption?

That question was specifically answered by @zddoodah in the post above:
"The estate may use estate assets to repair estate assets."

 

[LdiJ]

We do plan on retaining a local probate attorney. We were using my parents estate lawyer, but he has retired.
The question I have is this: When my dad passes, will the executor (who is the current DPOA and managing the house repairs) be able to continue using estate assets to repair estate assets without interruption?

Maybe not entirely without interruption. As you were already told, the POA expires upon your father's death, and it will take a little bit of time for your brother to get court approval to go ahead as executor and get the letters testamentary. So, there will be a window where he won't be able to access the assets unless he also happens to be on the accounts he wants to access.

For example, I am named as the executor of my mother's estate. I am also her POA. She added my name to one of her bank accounts several years ago, and keeps enough money in that account so that I can handle necessary matters without interruption. So we are covered there. Otherwise I will have to wait to access any other estate assets until after I have been officially named as the executor by the court.

 

[LdiJ]

That question was specifically answered by @zddoodah in the post above:
"The estate may use estate assets to repair estate assets."

That didn't fully answer the OP's question.

 

[Zigner]

That didn't fully answer the OP's question.

It could have been fleshed out a bit more, but it did, in fact, answer the question.

 

[JM1975]

Maybe not entirely without interruption. As you were already told, the POA expires upon your father's death, and it will take a little bit of time for your brother to get court approval to go ahead as executor and get the letters testamentary. So, there will be a window where he won't be able to access the assets unless he also happens to be on the accounts he wants to access.

For example, I am named as the executor of my mother's estate. I am also her POA. She added my name to one of her bank accounts several years ago, and keeps enough money in that account so that I can handle necessary matters without interruption. So we are covered there. Otherwise I will have to wait to access any other estate assets until after I have been officially named as the executor by the court.

We do have full access to his cash and brokerage accounts. My brother and I (the co-DPOAs) were added to their accounts when my parents were still deemed competent.

 

[adjusterjack]

We do have full access to his cash and brokerage accounts. My brother and I (the co-DPOAs) were added to their accounts when my parents were still deemed competent.

Then you will be free to continue your efforts uninterrupted since it would be your money immediately upon your father's passing.

 

[zddoodah]

The question I have is this: When my dad passes, will the executor (who is the current DPOA and managing the house repairs) be able to continue using estate assets to repair estate assets without interruption?

I'm not in Colorado, but...as someone already noted, the authority conferred by a POA dies when the principal dies. As a general matter, the person nominated in a will as executor has no authority until he/she is appointed as executor by the probate court. If there's a significant concern, then an preparatory, antemortem consultation with an attorney may be a necessity.

Of course, as a practical matter, you may continue to have access to the money, and maybe no one will object if you don't act 100% in accordance with the law, but....

I also agree that, if the accounts have pay-on-death beneficiaries designated, and if you and your brother are the designated beneficiaries, or if you are already joint owners of the accounts, then you'll still have access to the money and the legal ability to use it.

 

[LdiJ]

We do have full access to his cash and brokerage accounts. My brother and I (the co-DPOAs) were added to their accounts when my parents were still deemed competent.

Were you and your brother also added to the house?

 

[JM1975]

Were you and your brother also added to the house?

No. Our attorney had mom removed when she passed away, so its just in dad's name.

 

[LdiJ]

No. Our attorney had mom removed when she passed away, so its just in dad's name.

Good, that eliminates some potential tax issues. I agree with what the others have said, assuming that you and your brother were added to the accounts as account holders and not just noted on the accounts as POAs.

There will be some tax issues with the brokerage account if you were added as account holders since you will have received those accounts as a gift rather than as an inheritance however. You won't get a stepped up basis to fair market value. Your basis will be your dad's basis instead, so you will have some tax to pay when you liquidate the accounts...assuming that there are gains.