An Executor is the person you name in your Will to take care of your affairs after you die. A Power of Attorney names a person, often called your agent or attorney-in-fact, to handle matters for you while you are alive. Generally speaking, your Power of Attorney ceases to be effective at the moment of your death.
What’s the Difference Between Power of Attorney and Executor?
Select someone you trust and who has your best interests in mind to act as your power of attorney. Typical charges include your spouse or partner, sibling, adult child or parent. Keep in mind that this person may have access to your bank account, Social Security checks and investment portfolio.
Power of attorney is essential in the event that you're incapacitated or not physically present to make decisions on your own behalf. Learn more in our in-depth guide. A power of attorney (POA) is a legally binding document that allows you to appoint someone to manage your property, medical, or financial affairs.
Some of the responsibilities and transactions you may execute on as power of attorney include:
The POA gives the attorney in fact (also known as the agent) the power to make decisions about your affairs. The type of POA you create dictates which affairs you are granting power over.
Power of attorney is essential in the event that you're incapacitated or not physically present to make decisions on your own behalf. Learn more in our in-depth guide.
To make your POA legally binding, sign and execute your document according to the laws of your state. This usually involves signing in front of witnesses or having it notarized. Consider giving a copy to your agent or letting your agent know where they can find a copy if needed.
As for legal liability, an agent is held responsible only for intentional misconduct, not for unknowingly doing something wrong. This protection is included in power of attorney documents to encourage people to accept agent responsibilities. Agents are not customarily compensated; most do it for free.
Some POAs take effect immediately after they're signed, and others only kick in after you're incapacitated.
Trust is a key factor when choosing an agent for your power of attorney. Whether the agent selected is a friend, relative, organization, or attorney, you need someone who will look out for your best interests, respect your wishes, and won't abuse the powers granted to him or her. It is important for an agent to keep accurate records ...
You can specify exactly what powers an agent may exercise by signing a special power of attorney. This is often used when one cannot handle certain affairs due to other commitments or health reasons. Selling property (personal and real), managing real estate, collecting debts, and handling business transactions are some ...
Anyone given power of attorney must be a legal adult (at least 18 years of age). You can always revoke or change your power of attorney if he or she has behaved dishonestly or inappropriately, or if a better candidate has entered the picture (such as a new spouse or a child who reaches adulthood).
An LPOA carries less authority and is used for specific needs in nonhealth situations, such as trading authority on an investment while you're out of the country. Appoint an estate or elder-law attorney to take over if you can't identify an appropriate person to act as your power of attorney.
Be clear about the differences between a durable power of attorney (DPOA) and a limited power of attorney (LPOA). A DPOA carries more authority than an LPOA because it goes into effect if you are not capable of making decisions on your own due to illness or long-term absence, and it carries no specific time frame.
You can always revoke or change your power of attorney if he or she has behaved dishonestly or inappropriately, or if a better candidate has entered the picture (such as a new spouse or a child who reaches adulthood).
The biggest difference between an executor and an attorney-in-fact is that the latter’s power to act on behalf of the principal exists only while the principal is still alive; once she or he dies, then all power to manage the estate of the deceased person passes to his or her executor under the Will. As soon as you die, your POA expires with your death, and the Will executor’s powers begin under your Will.
An executor carries out the wishes designated in an individual’s Last Will and Testament, (often called a “Will” for short), after their death. An executor is named in the written Will by the testator, who is the person to whom the Will belongs. When the Will is drafted, an individual may appoint co-executors to serve together, or appoint a primary and then an alternate, secondary executor. A person can amend their Will to change their named executor as many times as they want during their lifetime. After death, though, if the named executors are not alive to serve or decline to serve, then a court must appoint someone to replace them in order to ensure the wishes of the deceased person, as expressed in the Will, are carried out. When a person is appointed by the court, and not named in the Will, they are called a personal administrator.
Power of Attorneyis a legal document that gives an individual the authority to make decisions on behalf of someone else, often when the latter person has become incapacitated or is otherwise unable to make her own decisions. Someone with power of attorney is often referred to as the agent.
There are a few different kinds of power of attorney. The two most common two varieties are general power of attorney and medical power of attorney. General power of attorney gives an agent the power to make a wide range of decisions on financial matters, business transactions, retirement accounts and more.
The probate processis the act of filing the deceased’s will with the appropriate probate court, locating and collecting all the assets, paying off all debts associated with the estate and distributing what’s left to the proper beneficiaries. The executor must be extremely organized and detail-oriented.
Additionally, the job description for each role is slightly different, even though both deal with managing your affairs when you can’t. Your executor has a very specific and limited job to do: Making sure there’s enough money in your estate to pay off any debts and then channeling the rest to your heirs. Your agent, on the other hand, is more wide-ranging in their duties. The job could involve ruling on all kinds of decisions – financial, legal and medical – depending on what aspects of your life you’ve granted power of attorney over.
Two of the most prominent of these roles are the executor of your estate and your agent with power of attorney. The two roles may be filled by the same person, but the roles themselves are very different.
Your agent and your executor will play key roles in taking care of your affairs at the end of your life and beyond. Consequently, it’s paramount that you choose people who you trust and believe to be highly competent.
Power of attorney can be either durable or springing. If you sign a document giving durable power of attorney, your agent can immediately start making decisions on your behalf. With springing power of attorney, your agent will assume authority only once certain conditions has been satisfied.
Generally, the law of the state in which you reside at the time you sign a power of attorney will govern the powers and actions of your agent under that document.
A power of attorney allows you to choose who will act for you and defines his or her authority and its limits, if any.
In addition to managing your day-to-day financial affairs, your attorney-in-fact can take steps to implement your estate plan. Although an agent cannot revise your will on your behalf, some jurisdictions permit an attorney-in-fact to create or amend trusts for you during your lifetime, or to transfer your assets to trusts you created. Even without amending your will or creating trusts, an agent can affect the outcome of how your assets are distributed by changing the ownership (title) to assets. It is prudent to include in the power of attorney a clear statement of whether you wish your agent to have these powers.
Today, most states permit a "durable" power of attorney that remains valid once signed until you die or revoke the document.
Another important reason to use power of attorney is to prepare for situations when you may not be able to act on your own behalf due to absence or incapacity. Such a disability may be temporary, for example, due to travel, accident, or illness, or it may be permanent.
There are no special qualifications necessary for someone to act as an attorney-in-fact except that the person must not be a minor or otherwise incapacitated. The best choice is someone you trust. Integrity, not financial acumen, is often the most important trait of a potential agent.
The power may take effect immediately, or only upon the occurrence of a future event, usually a determination that you are unable to act for yourself due to mental or physical disability. The latter is called a "springing" power of attorney.
Generally speaking, your Power of Attorney ceases to be effective at the moment of your death. Your agent can only take care of your affairs while you are alive. After your death, your Executor should take over. In order to get authority, your Executor must file a death certificate, your Will, and other legal papers with a court official in ...
Even though named in your Will, y our Executor has no authority to act for you while you are alive. This means that people need have both a Power of Attorney (Agent) to give someone authority to act for them during life, and a Will (Executor) to name someone to wind up your affairs after you are gone. For more information on Powers of Attorney see ...
This expression is mainly used to differentiate a government’s executive branch from other branches such as the judiciary one. In business, this is the highest hierarchic positioning term of authority and power within an organization. The executive power might be concentrated in the top manager, which is commonly the Chief Executive Officer or the General Manager, or in a team of top executives.
This executive power includes authority to hire and fire employees, to manage financial resources, to decide about plans and projects, to introduce new product lines and to enter in new market niches.
The executive power might be concentrated in the top manager, which is commonly the Chief Executive Officer or the General Manager, or in a team of top executives. Whoever holds the executive power is responsible for the organization’s performance. This responsibility embraces goal setting and performance evaluations as well as decision making in ...
On the other hand, middle and low-level managers and supervisors also have certain executive power, on a lesser degree than top executives, but in a sense they could have enough authority to decide on small issues, which even though these will have a lesser impact they are either way executive capacities.