How can a person retain property rights after their death, given that they can no longer be said to actually possess property?

In denying that the dead can "possess" property, you might be understanding 'possession' in a very literal way, one that doesn't conform to how we understand property. A property right is a moral claim, not a physical relation. If some property of mine is stolen and carried to the far side of the globe, it's still my property, despite my not 'possessing' it. Similarly, every time I park my car and walk away, I don't physically possess the car -- but I retain a property right in it. (Note, also, that there any entities with respect to which people have property rights that can't be possessed in any physical sense -- a copyright, for example, or even the money in a bank account, which (in most cases) doesn't reflect ownership of any physical object and is nothing more than some digits in a computer program.)

So I don't see any barrier to the dead having property rights due to their being unable to be physically proximate to their property. Maybe your concern is captured by the slogan 'no ownership without an owner': If the dead don't exist, then they can't be the owners of property. But even here, that seems suspect. For one, the dead often leave the world with debts -- but others can't have a claim on the property of the dead unless the dead already do, that is to say, unless the dead have property rights.

My point? It's far from obvious that the dead can't satisfy whatever relations need to be satisfied in order to have property rights, and this is because having a property right is not a matter of standing in the right kind of physical relation with some object. It's a matter of standing in some kind of morally significant relation with that object. Now, I've not said anything about what that morally significant relation consists in -- you might take a look at Jeremy Waldron's encyclopedia article on property (http://plato.stanford.edu/entries/property/) for some answers to that question.

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