Does Power of Attorney Cover Estate Assets?

Estate planning is still a major issue among Americans. The 2026 Estate Planning Survey, done by Trust & Will, has found that more than half of the respondents have never even drafted any of the five major estate planning documents surveyed. Included among the 5,000 U.S. adults polled, just 11 percent reported that they have a financial power of attorney. The five documents are wills, trusts, medical powers of attorney, financial powers of attorney, and HIPAA authorizations.

That gap raises a basic question about what an estate actually includes. What assets are not considered part of an estate? Assets that bypass probate are usually not included in the probate estate. Examples of these assets include life insurance policies, retirement accounts with named beneficiaries, jointly owned property with rights of survivorship, and assets held in a living trust.

Financial and legal issues can quickly get confusing when one cannot make choices due to injury, sickness, or illness. To make managing the financial and legal decisions easy for the client, an agent gets given a power of attorney (POA). This means that a person trusted can handle the client’s financial and legal decisions.

Based on the terms of the document and laws in effect, the authority provided by the POA could entail the ability to deal with banking arrangements, settle debts, oversee properties, and address any other related matters. This scope depends on the document’s wording and local law. For example, California residents often review the terms of the document with an Upland durable power of attorney lawyer before they sign it.

Being aware of the importance of powers of attorney allows people to secure their possessions, plan for the unexpected, and avoid any disagreements about the ownership of an asset.

What a Power of Attorney Covers While the Signer Is Living

The document works during the signer’s lifetime and nowhere else. The signer, called the principal, names an agent, and the agent acts on property the principal owns. 

According to the Consumer Financial Protection Bureau (CFPB) guide, that work can include paying bills, overseeing bank accounts, making investments, and paying taxes. The guide also says the agent’s authority stays strictly limited to what the document and state law allow. 

Government benefits can be challenging because Social Security and the VA do not recognize a power of attorney alone, so the agent needs a separate appointment as a representative payee or VA fiduciary.

Where the Agent’s Authority Stops

A power of attorney ends when the principal dies, and responsibility for the decedent’s property passes to the estate’s personal representative.

In California, a decedent’s solely owned property must usually go through probate unless the estate falls under the small estate limit or the property passes outside of probate. During probate, the executor, who is designated in the decedent’s will, is appointed. If the decedent dies intestate, the probate court will appoint an administrator.

The former agent still needs to undergo certain steps. The CFPB guide asks them to notify the principal’s bank and other businesses promptly and warns that even an easy bill is no longer theirs to pay.

Assets That Skip the Estate Entirely

Not all property is inherited by one’s heirs after passing away. Some forms of property, such as money in one’s retirement account, living trust property, and bank accounts with a named beneficiary, are transferred outside of probate.

A payable-on-death bank account shows the pattern. In California, under the Multiple-Party Accounts Law, money left in an account with a named beneficiary at the owner’s death will not be subject to probate and will be distributed directly to the named beneficiary. In contrast, accounts with no beneficiaries designated are included as part of the deceased’s estate and go through probate.

If the only named beneficiary dies first, the account falls back into the estate. An agent may have managed that account for years, but the agent’s role ends at the owner’s death, and the beneficiary designation normally decides who receives the funds.

Authority over such an account is a separate matter. Whether an agent may alter a beneficiary designation turns on the document and on state law. The CFPB guide tells agents to avoid rewriting the principal’s plans for property at death and to get legal advice before attempting it.

A power of attorney covers estate assets before the death of the grantor. It controls the assets that belong to the grantor individually, and some of those assets become estate assets.

Planning is done by linking the durable POA with the will or trust and a current beneficiary form because they control different periods of time; the POA takes care of the period of incapacitation. The will or trust directs property at death. Beneficiary forms control the accounts that bypass both.