If you're wondering whether a power of attorney (POA) can sell a property before death, the answer is yes. A POA grants legal authority to another person to act on behalf of the principal. If it includes the authority to sell the property, the agent can sell it before the principal's death.

However, the scope of the power of attorney depends on the terms of the document. By the end of this article, you'll have a better understanding of the legal considerations involved in selling a home for someone else and how to do it confidently.

Key Takeaways 

• A power of attorney (POA) can sell a property before death if the authority is granted in the POA, but the scope of the power of attorney depends on the terms of the document.
  
  

• The types of property a POA can sell depend on the specifics of the document, and there may be limitations on the sale, such as the type of property that can be sold, time limitations, financial limitations, prohibited actions, and judicial approval.
  
  

• Different types of power of attorney can grant the agent the authority to sell the property before the principal's death. However, the scope of the agent's power is subject to the specific terms of the POA document.

Limits of a Power of Attorney in Property Sales

The types of property a POA can sell all depend on the specifics of the document.

The agent can legally proceed with the sale if the POA grants the authority to sell certain property, whether real estate, personal property, or other assets like stocks. 

However, the agent cannot sell the property if the POA doesn't explicitly grant this authority. 

In such cases, the principal may need to execute a new POA to facilitate the sale before their death.

• Limited Scope: The POA may only allow the agent to sell certain types of property, such as real estate or personal property.
  
  

• Time Limitations: The POA may restrict the time frame during which the agent can sell the property, requiring the sale to be completed within a specific period.
  
  

• Financial Limitations: The POA may impose limitations on the sale price or require the agent to achieve a minimum price for the property.
  
  

• Prohibited Actions: The POA may prohibit the agent from taking certain actions related to the sale of the property. For example, the agent may be forbidden from selling the property to a particular person.
  
  

• Judicial Approval: In some cases, a court may need to approve the sale of real estate before the agent can proceed with the sale.

Understanding the limits of a POA's authority is crucial to ensuring that your property is handled in accordance with your wishes. 

So whether you're granting a power of attorney or acting as an agent, make sure you know what's legally permissible before proceeding with any property sales. 

Patrick Hicks, head of legal for Trust & Will, reminds people that there are certain limitations that a POA needs to be aware of. 

“The POA cannot make any legal or financial decisions after the death of the Principal, at which point the Executor of the Estate would take over.” 

• Related: How to Get Power of Attorney for a Parent With Dementia

POAs That Enable Property Sales Before Death

When it comes to selling a property before the death of the principal, different types of power of attorney (POA) can grant the agent the necessary authority. 

Here are some of the POAs that can enable the sale of a property:

General Power of Attorney

This POA gives broad authority to the agent to act on behalf of the principal, including managing their finances and assets. Patrick Hicks of Trust & Will writes:

 “The POA cannot act outside of the Principal’s best interest.” 

A general power of attorney can include the authority to sell property before death, but the scope of the power is subject to the specific terms of the document.

Limited Power of Attorney

A limited POA authorizes the agent to perform a specific task or tasks on behalf of the principal. 

If selling the property is among the tasks specified in the POA, then the agent can legally sell the property.

Durable Power of Attorney

A durable POA remains in effect even if the principal becomes incapacitated or unable to make decisions. 

If the durable POA includes the authority to sell property, then the agent can sell the property before the principal's death.

Springing Power of Attorney

A springing POA takes effect only under specific circumstances, such as when the principal becomes incapacitated or unable to make decisions. 

If the POA specifies the authority to sell property, then the agent can sell the property when the trigger conditions are met.

Financial Power of Attorney

A financial POA grants the agent the authority to manage the principal's finances. If the POA document grants the agent the power to sell property, then they can legally do so.

The scope of the agent's power is subject to the specific terms of the POA document. The agent must act in the best interest of the principal and follow any instructions or limitations set out in the document.

Steps to Follow When Selling Property Before Death as a POA

As a POA, selling property before the principal's death can be challenging. It's essential to understand the specific steps to avoid legal issues or complications. 

Here are some of the steps to follow:

• Determine Authority to Sell Property. Review the POA document to determine if you have the authority to sell the property. The document should specify any limitations or instructions for completing the sale.
  
  

• Collect Necessary Documents. Gather all necessary documents and information, such as the property deed, survey, title report, and property disclosure statement. You may also need a written agreement with the buyer outlining the terms of the sale.
  
  

• Consider Hiring Professional Assistance. Depending on your familiarity with the process or any legal issues involved, consider hiring a real estate agent or attorney to assist with the sale.
  
  

• List the Property for Sale. If you're selling real estate, list the property for sale and market it to potential buyers. Your real estate agent can assist with this process.
  
  

• Review Offers and Negotiate Terms. Review the offers and negotiate the terms of the sale, including the purchase price, closing date, and any contingencies or conditions.

• Get Necessary Approvals and Signatures. You will need to get any necessary approvals or signatures from the principal to proceed with the sale.

• Close the Sale. Attend the closing of the sale and sign the necessary documents to transfer the property to the buyer.

The specific steps involved in selling property as a POA can vary depending on the property type and state requirements. To avoid legal complications, make sure to follow all legal requirements and regulations in your state.

Potential Risks and Challenges of Selling Property as a POA

Selling property as a power of attorney can involve a variety of risks and challenges. Understanding these risks is important for making informed decisions and minimizing any negative consequences. 

Here are some potential risks and challenges to consider:

• Lack of Clarity or Authority: The POA document must be clear and give the agent the authority to sell the property. If the document is unclear, the sale may get challenged or invalidated.
  
  

• Legal and Financial Liabilities: The agent may be held liable for any damages or losses resulting from a failure to follow legal or financial regulations related to the sale of the property.
  
  

• Conflicts of Interest: If the POA can financially benefit from the sale of the property, there may be conflicts of interest. These can lead to claims of fraud or other improprieties.
  
  

• Mismanagement of Funds: An agent mismanaging funds received from the sale may be subject to legal action or may be required to repay the funds to the principal or their estate.
  
  

• Family Conflicts: Selling property as a power of attorney can create conflicts within the family, especially if family members disagree with the decision to sell the property or the terms of the sale.
  
  

• Legal Challenges: The sale may get challenged by family members, creditors, or other interested parties. This could lead to costly and time-consuming legal challenges.

Review the POA document carefully, consult with legal professionals if necessary, and be transparent with all involved parties to mitigate these risks and challenges.

The Legal Process of Selling a Home After a Death 

Dealing with the sale of a property after the death of its owner can be a complicated and emotional process. Whether or not the deceased left a will, some legal steps need to be taken before the home can be sold.

The first step is to identify the estate's personal representative, who will manage the affairs of the deceased. If named in the will, this person is known as the executor, and they will need to apply for a Grant of Probate. If there is no will, the personal representative is known as an administrator and must apply for Letters of Administration.

Once the personal representative has been identified and the necessary legal paperwork obtained, the property can be sold. If the deceased owns the property, the personal representative can proceed with the sale as usual. If there is an outstanding mortgage on the property, the mortgage lender must be informed and their approval obtained before the property can be sold.

In either case, the personal representative has a legal duty to act in the estate's and its beneficiaries' best interests. Dealing with the sale of a property after a death can be a time-consuming and emotional process. Getting advice from a legal professional with experience in this area can help ensure the process runs as smoothly as possible.

Use Trustworthy to track the legal process. This will give you peace of mind that your important documents are protected and easily accessible when needed. 

What to Do While Waiting for Probate to Sell a Property

When a loved one passes away, selling their property can be a difficult process. One of the biggest obstacles is waiting for probate to be granted. Probate is the legal process that gives the executor the right to manage and distribute the deceased person's assets, including their property. While waiting for probate to be granted, there are a few important things to remember.

Firstly, putting the property on the market before probate is granted is possible. However, the sale cannot be completed until probate is granted. It is important to ensure the property is maintained, insured, and protected during this time. Most standard home insurance policies will not cover an empty property for more than 30 days, so you will need to arrange separate insurance.

It’s also important to check for any outstanding debts or charges on the property. This includes mortgages, equity release plans, and any charges from the local authority. These debts must be paid off before the property can be sold. 

Finally, keeping careful records of everything you do during this period is important. This includes any correspondence with potential buyers, insurance providers, and creditors. This will help to ensure that your decisions and actions are not challenged later on. Trustworthy can help you to securely store and manage these important documents. 

Don't wait until it's too late. Sign up for Trustworthy today and start protecting your important documents.

Tips for Selling a Probate Property

Selling a probate property is not easy, especially if multiple beneficiaries are involved. As an executor or administrator, you must legally sell the property at its open market value. To ensure that you have an accurate figure, it is recommended that you get at least three separate valuations from local estate agents and take an average of these.

Selling the property for significantly less than its open market price can result in legal action from other beneficiaries to recover their share of the difference unless all parties agree to the sale price. To avoid disputes, communicate clearly with all beneficiaries and seek their agreement before proceeding with a sale.

In cases where all beneficiaries agree to a quick sale, services specializing in buying probate properties may be a viable option. However, carefully consider any offer received and make sure that it reflects the property's true market value.

Keep detailed records and documentation of all actions taken in case of future disputes or legal challenges throughout the sale process with Trustworthy. With careful planning and execution, selling a probate property can be successful and profitable for all parties involved.