Next of kin and power of attorney (POA) serve different roles in managing someone’s affairs. A POA gives legal authority to an appointed agent to make financial or healthcare decisions. Next of kin, the closest living relative, has no legal authority unless formally granted through a POA or court order. A financial advisor can help integrate these into an estate plan to ensure decisions align with your wishes.
Understanding Next of Kin
The term “next of kin” refers to a person’s closest living relative, often determined by familial ties like blood relationships or marriage. This role generally includes spouses, children, parents or siblings, depending on the family structure and specific jurisdiction. Next of kin is a designation primarily used to identify someone who may be contacted in case of emergencies, handle certain administrative matters or inherit assets if there is no will.
It's important to note that the rights of a next of kin are not automatically all-encompassing. For example, while a next of kin might be notified in medical emergencies or handle funeral arrangements, they do not have automatic legal authority over financial or healthcare decisions unless explicitly named in a legal document.
In inheritance cases, next of kin may have rights if someone dies intestate (without a will), but their role depends on state laws and family circumstances. Unlike a POA, next of kin status does not grant legal authority.
What Is Power of Attorney?
POA is a legal document that grants someone, known as an “agent” or “attorney-in-fact,” the authority to act on another person's behalf. The individual granting this power, called the “principal,” can specify the extent of this authority, allowing the agent to manage tasks like financial transactions, property dealings or healthcare decisions.
Unlike informal roles such as next of kin, a POA is enforceable by law, with clearly outlined duties and responsibilities. Here are four types of POA to consider:
- General power of attorney: This type of POA grants broad authority to an agent to manage a wide range of the principal’s financial and legal affairs.
- Limited power of attorney: Someone with limited POA has specific authority over particular tasks, such as selling a property or managing a specific bank account, often with a defined end date that coincides with the accomplishment of the task.
- Durable power of attorney: Durable POA remains in effect even if the principal becomes mentally incapacitated. It is commonly used for healthcare or long-term financial management.
- Springing power of attorney: A springing POA becomes effective only upon a specific event or condition, such as the principal becoming incapacitated, offering flexibility for future planning.
It's important to note that regardless of the type, POA authority ceases upon the principal’s death, at which point the executor of the estate will usually take over. This distinction ensures that POA powers are strictly bound to the principal's living circumstances.
Does Next of Kin Override Power of Attorney?
Next of kin cannot override a POA because it's a legal document that grants specific decision-making authority to an appointed agent. The principal formally names this agent to handle responsibilities such as financial or medical decisions, and this legal authority takes precedence over any informal relationship, including next of kin.
For example, if someone has named an agent through a durable POA for healthcare, that agent has the exclusive right to make medical decisions on the principal’s behalf, even if the next of kin disagrees. The next of kin may only step in if no POA exists or the appointed agent is unable or unwilling to act.
If disputes arise between a POA holder and the next of kin, courts usually uphold the POA unless there is evidence of fraud or incompetence. While next of kin status holds emotional significance, it does not provide legal authority unless formally granted through a court order or similar legal process.
Can Anyone Override a Power of Attorney?
POA can be overridden, but only in specific cases. The principal can revoke it at any time if they are mentally competent. If the principal is incapacitated, family members or others can challenge the POA in court if the agent is suspected of acting against the principal’s best interests or abusing their authority.
Courts may revoke or override a POA if there is evidence of fraud, coercion, or neglect by the agent. If the agent is unable to fulfill their duties and no replacement is named, the court may appoint a guardian or conservator to take over.
Overriding a POA requires following legal procedures and providing solid evidence to protect the principal's well-being.
Bottom Line
Next of kin and POA serve different purposes in managing someone's affairs. Next of kin is based on family relationships and has no legal authority unless formally granted, while a POA is a legal designation with specific rights and responsibilities. Understanding the difference helps determine who has decision-making authority in healthcare or financial matters and how actions align with the individual's wishes.
Tips for Estate Planning
- A financial advisor help you create an estate plan. Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now.
- You can save some money by creating an estate plan on your own. But, you should still be careful with these DIY estate planning pitfalls.
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