Power Of Attorney vs Executor

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“People often consider estate planning as they approach retirement and ensure their final wishes come true. They may also consider hiring someone to assist them with their financial affairs. They may need to appoint an executor in their will or a power of attorney to do this.”

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Power Of Attorney vs Executor

Even though many people are familiar with these terms, there sometimes needs to be more clarity about whether they’re interchangeable. Nevertheless, they’re essential roles and can help a senior care team meet their needs. Let’s examine Power of Attorney vs Executor, starting with the executor of a will and moving on to a power of attorney.

 

What Is Power of Attorney?

An attorney-in-fact is a legal document granting one person (usually the agent) the authority to make confident decisions on behalf of another. Powers of attorney come in different types. The two most common are the medical and financial power of attorneys.

  • Having a medical power of attorney gives the agent control over the medical decisions made on the patient’s behalf. When a patient cannot make medical decisions for them (for example, if they are in a coma), the agent is legally responsible for making decisions for them.
  • An agent with financial power of attorney can make financial decisions for the person in question. It is not only associated with estate planning but can serve various reasons throughout a person’s life.

For example, if you purchase property in a foreign country, you may provide your agent with only that purchase power of attorney. It is possible to assign powers of attorney to different people according to the document type, and can be dealt with by two documents.

  • Powers of attorney can take place in two different ways. Agents with durable powers of attorney can make decisions immediately for the individual. It can only end if the person who created the agreement revokes it or dies. Power of attorney cannot continue after death under any circumstances.
  • Springing power of attorney is another type of power that can operate more. This happens when a physician determines that the individual cannot make decisions independently.

 

Take on a Power of Attorney Role With These Tips.

A lawyer has a lot of responsibility. Below are some do’s and don’ts that can help you manage that responsibility well:

 

Power of Attorney Role

 

DO fully understand what your powers entail.

In some cases, power of attorney allows limited capabilities only applicable to certain assets or a limited period. In others, total control exists with the help of the individual.

 

Get advice on your financial assets.

It would always help to ask a financial advisor for advice on protecting your financial assets. Attorneys and accountants are not financial advisors.

 

What Is an Executor of an Estate?

A person’s executor takes on the role after they pass away. If they have a will, the executor probably knows ahead of time and is prepared. If they don’t have a will or estate plan, the Probate Court will nominate one.

The executor’s responsibility is to ensure that all funeral expenses and inheritances pass correctly.

 

How Should You Choose An Executor?

You must be careful when choosing an executor because the job is challenging. Here are some questions you can use as guides:

 

Is your executor local?

When dealing with your beneficiaries and assets, choosing an executor who lives in your province, city, or town is extremely helpful.

 

Does your executor have a good track record of completing tasks?

The role of an executor includes making immediate arrangements, disbursing the estate, filing tax returns, collaborating with legal and accounting professionals, and gathering, protecting, evaluating, and selling assets.

 

What is the difference between the power of attorney and an executor?

The agent acting on your behalf only has the authority to work during your lifetime. In contrast, an executor is appointed by a probate court to administer your estate after you pass away. Only after your death can the executor act.

Although an agent’s duties are like an executor’s, they must perform them at opposite times. The Clarksville estate planning attorney’s authority terminates when you die.

 

How Does a Power of Attorney Work?

A time will come when you won’t be capable of managing your finances or your personal life on your own. It will be necessary for someone else to take care of your accounts, pay your bills, file your taxes, and make healthcare decisions if you become physically or mentally incapacitated.

It is only sometimes possible for loved ones to assume your responsibilities. An individual who wishes to assist in making these decisions must have property authority.

When you appoint someone to act for you during your life, a power of attorney can help you make healthcare, financial, and other important decisions. Generally, your agent cannot decide for you after you die, only during your life.

 

Responsibilities of the Executor

An executor is responsible for settling your bank accounts, filing your last tax return, and managing your assets after you die.

In addition to satisfying debts, locating assets, disputing claims against your estate, and disbursing assets among the beneficiaries of your will, the executor is nominated by your last choice and appointed by the court.

If you are alive at the time, your executor cannot act on your behalf. The executor must only work after your death, with permission from the court. Sometimes, I receive questions regarding whether an executor can represent a person while they are alive. The answer is always no.

An executor is usually the same person as your agent, but that person must still act in the appropriate capacity. That’s the job of the person you appoint under your power of attorney.

 

Positions Importance, Power Of Attorney or Executor.

Both jobs are important, but they come with different duties. Having a power of attorney isn’t necessary, but if it happens, you’ll be glad someone is looking after your finances and health.

You can’t make important decisions about your care if you’re lying in a hospital bed incapacitated, nor can you make sure the bills and mortgage are paid if you’re incapacitated.

On the other hand, an executor is responsible for administrating your estate following your last will. Both positions are important, but they are handled differently by different people.

 

Executor vs Power of Attorney: Serving As Executor and Power Of Attorney.

Conflict of interest should not arise from simultaneously serving as executor and power of attorney. Many spouses or adult children have both roles.

In some cases, appointing two people to handle the duties might be more appropriate. As mentioned above, there are differences between the roles, so one individual could serve as power of attorney while another would manage the estate.

 

Power Of Attorney vs Executor: How They Differ

What is the difference between power of attorney and executor? The most significant difference between these roles is the time they start. You can grant power of attorney at any point, temporarily or permanently. We recommend you consult with an attorney before drafting a power of attorney.

Executing an estate begins following the death of. The judge appoints an executor instead of lawyers receiving paperwork. If a will is in place, it likely has a provision to nominate an executor. However, the court must formally nominate the person as executor. The court will choose an individual to fill the post if no estate planning exists.

A power of attorney could involve a difficult decision concerning health concerns, which can be difficult for the person taking on the responsibility. Being an executor can require complex money choices, but you need health choices.

It’s crucial to understand that although both jobs have similar functions, they’re not the same. Just getting power of attorney doesn’t guarantee they will be appointed executor. Naming someone as executor in a will will not give them any legal rights if the person lives. There are two distinct roles. In estate planning, it is important to think about the best person for each position individually.

Also, the job descriptions differ. Both are about handling your affairs when you’re unable to. Your executor has a specific and limited task: ensuring enough funds within your will to settle any outstanding debts, then passing the remainder to your inheritors. Your agent, however, is more expansive in their responsibilities. It could be a matter of deciding on various legal, financial, and medical issues – based on the areas of your life that you’ve granted authority to act on your behalf.

 

Can One Person Be an Executor of the Estate and Power of Attorney?

Executor of will vs power of attorney: One person could serve as your agent and the administrator of the will. This is common, particularly if you’ve selected one of your children or a trusted relative to fulfill the duties. Both roles will not overlap. A power of attorney only becomes applicable while you’re alive, and executors are only accountable after you die.

But remember that they are two big jobs with many responsibilities. Appointing the same person for each role might require a lot of them. If you need help finding the right people to choose, you should look into hiring an estate planning lawyer.

 

Make Sure Power Of Attorney or Executors Can Carry Out Their Duties Smoothly

There can be challenges for those granted power of attorney or named executors despite the law’s provisions to make sure they can carry out their duties smoothly.

Power of attorney agents sometimes misuse their position or mismanage assets, especially when those close to the principal are close to them. Because the principal wasn’t mentally capable of making the decision—or they influenced them unduly—they may challenge the POA.

Therefore, anyone granted power of attorney must speak to their loved ones and make sure their wishes are clear before giving them.

Several issues can disrupt the executorship process as well. The method of probate, when the executor applies to the court for their appointment, can take a long time—up to a year or more in some cases.

Sometimes, we can speed up the process through the courts (for example, if a real estate transaction is imminent).

 

Power of Attorney vs Executor of Estate: What Makes Someone A Good Executor/ A Good Power Of Attorney?

The probate process and administering an estate and its assets are very time-consuming and need much paperwork and attention to detail for executors. In addition to being capable of handling financial administration tasks like paying bills and taxes, this person should be comfortable communicating with your beneficiaries.

Ideally, your financial power of attorney Ventura attorney should be calm under pressure, close to you, and capable of making sound decisions. They should also understand your business interests and investments and where you keep your money.

For example, a small business owner’s bank accounts may relate to personal assets. Your financial power of attorney Ventura lawyer would enjoy knowing that information to ensure your employees get paid if paying your employees is only possible from within your account.

 

Power Of Attorney vs Executor: Pros and Cons

 

Pros

Executor of Estate

  • There is no legal authority to regulate the assets of the main party or their ability to make decisions during their lifetime.
  • It should be in the estate’s best interests and show the level of care and competence expected of a typical person.

 

Power of Attorney

  • The legal authority that governs the main party’s decision-making process within the predefined limitations
  • A normal or broad POA doesn’t allow representation but only allows them to take action on your behalf in the same manner as you would

 

Cons

Executor of Estate

  • Based on the size and extent of the estate’s complexity, the role of executor could be a lengthy commitment for the party involved.
  • If someone proves a breach or negligence of duty, they may seek damages.

 

Power of Attorney

  • The agent could perform actions or conduct things contrary to the principal’s desires.
  • Other than the principal cannot have direct control over the agent’s activities.
  • A third party, such as banks or other financial institutions, can revoke the power of attorney due to fraud.

 

Bottom Line

Several legal restrictions in California ensure an attorney can’t take advantage of their situation. Additionally, if your attorney fails to manage affairs by your power of attorney, they can be held responsible.

Neither your attorney nor your life insurance provider can make a will for you, change your existing choice, change a beneficiary on your life insurance plan, or assign you a new attorney.

Hedy Ghavidel

HEDY GHAVIDEL Managing Attorney  Roseville Office  1-866-471-6981  info@attorneysre.com Bio...

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