Good Faith Actions After the Principal's Death
Communication is rarely instant. A principal may pass away while their agent is in the middle of handling financial affairs, paying a bill, or managing property. This statute protects the agent and anyone dealing with the agent from liability. The protection applies as long as they did not know the principal had died.
The death of a principal who has executed a durable power of attorney does not revoke or terminate the agency as to the agent or other person who, without actual knowledge of the death of the principal, acts in good faith under the power. Any action taken in good faith pursuant to this subsection, unless otherwise invalid or unenforceable, binds successors in interest of the principal.
A.R.S. § 14-5504(A)This means financial institutions that process a payment, title companies that record a deed, or investment firms that execute a trade are all protected. They are not penalized for honoring the agent's authority before word of the principal's death arrives. Those transactions stand.
Standard Powers of Attorney Get Similar Protection
A separate rule applies to standard (non-durable) powers of attorney. If the principal becomes incapacitated but the agent does not know, the agent's good-faith actions still bind the principal and their successors. The power of attorney (POA) does not expire just because the principal lost capacity, as long as the agent has no actual knowledge of the change.
The disability or incapacity of a principal who has previously executed a written power of attorney that is not a durable power does not revoke or terminate the agency as to the agent or other person who, without actual knowledge of the disability or incapacity of the principal, acts in good faith under the power.
A.R.S. § 14-5504(B)The key phrase in both cases is "actual knowledge." Once the agent learns the principal has died or become incapacitated, the protection ends. But until that moment, the law shields everyone involved from unintended consequences.
This protection matters for families because the personal representative of an estate may not be appointed right away. During the gap between death and probate court involvement, the agent's prior actions remain valid. This prevents confusion over health care bills, mortgage payments, and other time-sensitive financial affairs.
If you hold a POA document for a loved one, keep it accessible and current. Financial institutions and other parties are more likely to honor a well-organized, clearly written document. This reduces delays when urgent action is needed.