A common question I am asked is: What is the difference between having power of attorney and serving as an executor?
The difference is literally life and death. The agent serving under your power of attorney only has power and authority to act during your lifetime. Conversely, the executor is a person who is appointed by the probate court to close out your estate when you pass away. The executor only has power to act after your death.
While an agent’s responsibilities and an executor’s responsibilities are similar, their roles are required for opposite times. As soon as you die, your power of Clarksville estate planning attorney is void, and your agent’s authority is terminated. In the same way, your executor has no authority until the moment you die and he or she is appointed by the court to take over your accounts.
How a Power of Attorney Works
At some point in your life, you will not be capable of taking care of your finances and your personal life. If you become physically or mentally incapacitated, you will need someone to help manage your accounts, pay your bills, file your taxes, and make healthcare decisions for you. Unfortunately, a loved one does not always have the legal authority to automatically assume your responsibilities. An individual who wants to help make these decisions must have the property authority to do so. This is where a power of attorney comes into play.
A power of attorney is a document that allows you to appoint someone to make healthcare, financial, and other important decisions for you during your life. Just remember that your agent only has the ability to act during your life, and generally cannot make decisions for you after your death.
The Role of the Executor
When you die, your bank accounts, investments, and personal affairs do not simply disappear. Someone needs to have the legal ability to settle your accounts, file your last tax return, and manage the upkeep of your personal assets. That is the role of the executor.
The executor is nominated by your Last Will and Testament and is appointed by the Court. Their responsibilities include satisfying debts, gathering assets, resolving claims against your estate, and disseminating assets among the beneficiaries of your will.
Remember that while you are living, your executor has no power to act on your behalf. The executor’s is only authorized by the Court to act after your death. Sometimes I am asked whether an executor can take action on behalf of a person while they are still alive. The answer is always no. That is the job for the person you appoint as your agent under your power of attorney. Often times, your executor and your agent are the same person, but that person still must act in the proper capacity.