What will happen to your property if you got in an accident and couldn’t speak for yourself? Or if you died suddenly? And what about your next of kin? Who would handle their financial matters if something happened and they can’t do it themselves?
There are a number of ways to designate someone to handle your affairs for you in the event you can’t do it yourself. Two of the most common options are to designate a power of attorney agent or name an executor of your last will and testament. These two roles can sometimes get confused, and it’s not always clear which person should be handling the estate.
This quick comparison will explain what it means to be the power of attorney agent or the executor and when those roles apply.
Power of Attorney Agent
- Applies before someone’s death 🪦.
- The agent makes decisions on the behalf of the other person.
- The agent has access to accounts to manage finances.
- There are different types of power of attorney.
- A financial power of attorney and medical power of attorney can be established separately.
- Power of attorney ends the moment someone dies.
A power of attorney document will establish who will serve as the agent that can make financial and medical decisions on behalf of a person (the principle) if that person can’t speak for themselves. For example, if someone was in a coma the power of attorney agent would step in and make medical decisions or take action to manage their finances.
The four primary types of power of attorney are:
General – With general power of attorney the agent can make any decisions that the principle would make if they could do it themselves.
Limited – Limited power of attorney restricts what decisions the agent makes and when they can make them.
Durable – A durable power of attorney agent can begin making decisions for the principle immediately if they are incapacitated.
Springing – Unlike durable power of attorney, with springing power of attorney there are conditions for when agents can make decisions. Typically, it requires a doctor officially determining the principle can’t make decisions on their own.
A person can have more than one power of attorney agent. You can name someone to be a power of attorney agent for handling medical decisions and another person can be granted power of attorney for financial decisions 💰. Having two separate agents will require two power of attorney documents. Regardless of how many agents there are, power of attorney ends automatically when the principle passes away.
Executor of the Will
- Applies after a person’s death.
- The executor carries out the directives of the will but doesn’t make decisions.
- The executor has authority to pay debtors from accounts and distribute assets.
- There can be co-executors for a will.
- An executor can be appointed by the probate court.
The executor of a will doesn’t make decisions. Their role is really administrative, and it doesn’t begin until a loved one passes away. At that time the will gets reviewed and whoever is named the executor, or co-executors 👫, takes over to make sure the instructions in the will are carried out.
An executor is usually responsible for making funeral arrangements unless someone else has the right of disposition, which means they are in charge of anything related to disposing the body. The executor also makes sure existing debts are paid out of the estate accounts and that benefactors receive remaining assets according to what is specified in the will or probate court.
Can One Person Have Power of Attorney and Be the Executor?
Yes, it’s possible for the same person to be named the power of attorney agent and executor for a loved one. It’s actually very common since a person’s spouse, parent or adult child usually serves as both. However, it will require two separate documents to establish each role.
If you need help making advanced arrangements or making sense of who’s in charge of funeral services and disposition after death our team can provide more information. Call or text 24 hours a day to get assistance and answers to your questions.