Dear Alan:
Please accept my condolences. The bank is correct. A financial power of attorney is automatically terminated upon the principal's death. People in Minnesota have the option to have one or both types of financial powers of attorney: the common law power of attorney or the Statutory Short Form Power of Attorney. Most people have the Statutory Short Form Power of Attorney. The Statutory Short Form can be found in Minnesota Statutes Chapter 523.
Under Minnesota Statutes Section 523.08, the power of attorney will terminate on the earliest of the following: the death of the principal, the expiration date specified in the power of attorney, or, in the case of a power of attorney to the spouse of the principal, upon the start of divorce, separation, or annulment proceedings of the principal's marriage. Also, unless the power of attorney is "durable", it will also terminate when the principal is incapacitated. Minnesota Statutes § 523.09. Further, the principal can terminate the power of attorney by revoking it in writing. Minnesota Statutes § 523.11.
Since your mother passed away, the power of attorney has terminated. Since the power of attorney is terminated, you have no authority via the power of attorney to gain access to your mother's bank account. So, how can you gain access to your mother's bank account to pay for her funeral?
First, let's get this out of the way - children and non-spouses are not legally responsible to pay for the funeral of their parent or other relative. As much as you may feel obligated to do so morally, you do not have to pay for your parent's funeral. If you sign a funeral contract, you become responsible to pay the bill. Do not sign anything that you do not understand, agree with, or cannot afford.
Under Minnesota law, if a person dies without the means to pay for their funeral or final disposition, the county will provide for it (after investigating if there is a prepaid funeral plan or a spouse that can pay). Minnesota Statutes § 261.035. The county will not provide for anywhere near an elaborate funeral, so families do sometimes choose to pay for a more elaborate funeral for their relative.
Second, once you do gain access to your mother's money, you must be careful about how you spend her estate. Minnesota law has a hierarchy of priority debts and claims to be paid out of a deceased person's estate. Minnesota Statutes § 524.3-805. The first debts to be paid are the costs and expenses of administrating the estate (if any). The second debts to be paid are your mother's reasonable funeral expenses.Third, are debts and taxes under federal law. Fourth are the reasonable and necessary medical, hospital, or nursing home expenses of the last illness of your mother (including Medical Assistance claims). Fifth are the same as the fourth except it is for the expenses during the year preceding her death. Sixth are debts with preference under Minnesota law and state taxes; and finally seventh, all other debts.
You can see that the legislature placed funeral expenses almost at the top of the hierarchy, so it is very important that your mother's assets (e.g. her bank account) be used to pay for the funeral, if there are no administration expenses.
I am assuming that your mother did not have a prepaid burial contract or life insurance policy to pay for her funeral. If you are not a co-owner or beneficiary of your mother's bank accounts, you won't have immediate access to your mother's account. If your mother did not own real estate in her name only and all of her titled personal property totals less than $75,000, then it may be possible for you as her "successor-in-interest" to collect the title to the bank accounts into your name through an "Affidavit for Collection of Personal Property". MinnesotaStatutes § 524.3-1201.
To use this method, besides the two conditions above, there must not be any pending probate proceeding and thirty days must have elapsed since her death. You may obtain the affidavit form from the Minnesota Courts website at www.mncourts.gov or by going to your local courthouse. Once you fill it out, you must sign it in front of a notary public and take it to the titleholder of the personal property, in this case the bank. Keep a copy for your records. The bank should then transfer title of the bank accounts into your name.
This will take at least thirty days, so there may be a delay in having the funeral. Perhaps the funeral home would agree to do the funeral sooner based on your mother's latest bank statement, showing enough money to pay for a funeral. There would be even further delay if the deceased person needed to probate their estate - for example, if they owned real estate in their name only or had more than $75,000 in titled personal property (that didn't pass automatically to a joint owner or a beneficiary). Thus, in order to avoid delay and uncertainty, if affordable, it is better to prepay for a funeral. Unfortunately this won't help you, Alan, but perhaps others can better prepare based on your experience.
