Power of Attorney vs. Executor of Estate: Who’s Who in Estate Planning?
Estate planning takes a village. From ensuring your assets are protected to making arrangements for your loved ones after you’re gone, there are numerous important decisions to be made.
Two critical positions—power of attorney agent and executor—sound deceptively alike but have key differences.
Knowing who’s who can empower you to make informed decisions when establishing an estate plan. But, confusing these two roles can lead to legal missteps that go against your wishes.
With the right understanding of what a power of attorney and executor do, you can craft an estate plan that maintains your autonomy if you become incapacitated and provides clear instructions for what should happen after you pass away.
Here’s everything you need to know about power of attorney agents and executors.
What is a Power of Attorney?
A power of attorney is a legal document that allows you to appoint someone you trust to make decisions on your behalf if you become incapacitated. The person you designate is referred to as your agent or attorney-in-fact.
Powers of attorney generally come in two main forms:
Financial Power of Attorney
This allows your agent to handle money matters like paying bills, managing bank accounts, and filing taxes.
Healthcare Power of Attorney
Also called a healthcare proxy, this authorizes your agent to make medical decisions if you are unable to communicate.
Powers of attorney can go into effect immediately upon signing or only when you become incapacitated. They cease having legal authority upon your death.
What Is an Executor of a Will?
An executor is a person you name in your last will and testament to carry out your final wishes after you pass away. Their key responsibilities are to navigate the probate process and settle your estate by:
- Filing the will with the probate court
- Using estate assets to pay outstanding debts
- Distributing remaining property to beneficiaries
An executor is appointed to the role by the probate court after you pass away. They are typically a spouse, adult child, close friend, or a professional fiduciary.
Key Differences Between These Two Important Roles:
A power of attorney allows someone to act on your behalf while you’re still alive but incapacitated. An executor assumes their duties after you pass away.
Your agent under a power of attorney can make healthcare and financial choices guided by your wishes. An executor cannot make discretionary decisions, just carry out administrative estate tasks.
A properly drafted power of attorney enables you to avoid court intervention in your affairs if incapacitated. An executor must go through the probate court process.
A power of attorney legally acts on behalf of a living person. An executor represents the deceased person but also owes fiduciary duties to beneficiaries.
Why Understanding Both Roles Is Crucial for Estate Planning
While powers of attorney and executors serve distinct purposes, having both integrated into an estate plan is ideal for fully preparing for incapacity and death.
A durable power of attorney lets you control health-related and financial choices if you become incapacitated. Naming an executor in your will ensures someone trustworthy handles probate and follows your distribution wishes.
Together, they allow you to maintain autonomy during life and provide instructions for what should happen after you’re gone. That’s the mark of a holistic estate plan.
How to Choose the Right People for These Important Jobs
Serving as power of attorney or executor comes with major legal responsibilities. So, who you choose is an incredibly important decision.
Ideally, you want people who are:
- Trustworthy and responsible
- Able to make difficult decisions in stressful situations
- Familiar with your values and wishes
- Organized with financial/administrative skills
We recommend having in-depth conversations with anyone you’re considering for these roles. Explain what would be expected of them and get their honest input. For maximum protection, name successors as backups.
You’ll also want to work closely with an experienced estate planning attorney to draft customized legal documents outlining each person’s powers and limitations.
Can the Same Person Serve as Both Power of Attorney and Executor?
The same person can serve as both power of attorney and executor, though it’s not required. Here are some key points on naming the same person to both roles:
- It’s very common to name your spouse or adult child as the agent of your power of attorney and executor of your estate. This consolidates major responsibilities with someone you trust.
- Appointing one person creates continuity between handling your affairs if incapacitated and settling your estate after death.
- The person should be highly trusted and capable since they’ll have broad authority over your healthcare, finances, and estate.
- Separate documents are still needed outlining each role’s specific powers and duties.
- Consider naming at least one alternate or successor in case your first choice is unable to serve in either position.
The decision is personal based on your relationships and assessment of an individual’s skills. A qualified estate planning attorney can advise whether consolidating roles makes sense in your unique situation. The key is appointing reliable people who will faithfully carry out your wishes.
Let Stivers Law Help Craft Your Power of Attorney and Will
Crafting an estate plan that properly appoints people to serve as your power of attorney and executor is crucial for protecting yourself and your family. But you don’t have to figure it out alone.
The legal team at Stivers Law has the knowledge and experience to provide trusted guidance through this process. A knowledgeable estate planning attorney will take the time to understand your unique wishes and relationships in order to draft customized legal documents best suited for your situation.
Don’t leave it to chance – let us help you appoint reliable people who will faithfully carry out your healthcare, financial, and end-of-life instructions. Contact Stivers Law today to schedule an estate planning consultation. Our team is here to provide clarity and peace of mind.