The Difference Between Executor & Power of Attorney

Having responsibility over a person's estate

A Will is the document where someone outlines their wishes for their estate after they die. It's also the legal document which appoints people to administer all the assets, or deal with decisions, if the capacity of the Will maker is lost before they die.

Being appointed as executor of estate or power of attorney comes with legal obligations, power and certain processes to undertake both in and out with the supreme court.

The choice of who to take on the administration of money, property and other assets after you die, as well as to handle decisions on medical treatment and financial affairs if you lose mental capacity- is huge. Bearing in mind these appointed people will have to navigate complex legal and financial affairs, it's not a role you appoint flippantly or without thought.

Whilst a Will maker has plenty of time to decide, as a newly appointed power of attorney, it can sometimes feel overwhelming to know how to proceed- especially when you are personally liable.

Distinguishing your role from others can be a good way to feel clearer over what power of attorney or executor of estate actually means for you. Read on to uncover the differences, as well as the respective legal capacity of each.

Power of Attorney

The What: A power of attorney document allows the Will writer (the principle) to appoint someone else (the attorney-in-fact) to act on their behalf if they lose mental capacity.

This can be a general power of attorney, or specific to financial or legal matters. Whilst rules differ by states, in some states you can also appoint a medical power of attorney- sometimes called an advance care directive- to make personal and medical treatment decisions as well.

The Why: Ensures the wishes and best interests of the principle are maintained, even if they are no longer able to make their own decisions.

This provides legal authority to the power of attorney to manage matters of the estate- including money, property, debts and income streams. In having a power of attorney to preserve the integrity and management of the estate, the principal can have peace of mind that their end of life wishes will be fulfilled.

The When: A power of attorney is appointed and enacted when the principle is still alive.

The designated powers are outlined and only become relevant when the Will writer is alive, but unable to make their own decisions- commonly due to illness involving loss of mental capacity Depending on whether they appointed an enduring power of attorney, when a power of attorney ceases will differ- however typically it is maintained whilst the Will writer is unable to make their own decisions.

The How: The scope of responsibilities depends on whether the power of attorney is general, limited or enduring.Each has different authorities to make financial or medical decisions on the principal's behalf and to manage the estate in different ways.

Executor of Will:

The What: An appointed person legally responsible to administer all assets in the deceased's estate, carry out instructions and go through probate. They will also pay debts and tax returns, carry out funeral instructions and manage any legal problems which arise in court.

The Why: Ensures the wishes of the deceased are carried out in alignment with their Will; creating a legal obligation to act in the testator's and beneficiaries best interests. In this way, the executor carries out estate administration efficiently and honestly- ensuring estates are distributed amongst beneficiaries without undue delay.

The Where: Appointed by the testator when they wrote their Will, and active only after the testator dies. The executors duties end when the estate has been distributed and all personal matters outlined in the estate taken care of.

The How: Settling debts, paying taxes, distributing assets to beneficiaries and ensuring any remaining assets are managed according to the testator's wishes.

So What's the Difference?

1. Timing of Appointment

Whilst an executor is appointed after the death of the testator, a power of attorney is appointed while the principal is still alive.

The impact? If you're the attorney-in-fact, your responsibilities could resume at any point after you've all crossed the i's and dotted the t's on the attorney form. Whether due to the principal's ill health or jetting away abroad, you would be handling their affairs whilst they're still alive. In contrast, as an executor your responsibility only kicks in after the death of the testator.

2. Scope of Authority

As an executor, you might have little to do whilst the testator is still alive. You might even mildly forget about the role. But when the testator dies, the executor's responsibilities go far and wide; from managing the testator's estate to carrying out their end-of-life instructions. Apart from individual differences within the estate, the role of the executor is therefore pretty consistent.

In contrast, power of attorney means your role varies depending on the defined scope of your specified role. Whether general powers of attorney handling all financial and legal affairs, or limited and only permitted to handle specific actions on the principal's behalf, there's wide variety in the responsibilities of this legal role.

Overlap?

It's worth noting that in Australia, one person could appoint you as both the executor and a power of attorney. This however does not mean the two carry the same responsibilities. If you are appointed as both, you'll fulfil the duties as both an executor and a power of attorney separately- due to the very nature of when each person appointed in these roles takes on their duties.

There's a lot to get your head round and a lot of responsibility to take on. But holding an executor or power of attorney role can be a powerful way to honour and be of service to your loved one- offering the chance to help protect and carve their legacy, when they're no longer able to.

Write your Will Today

Safewill's here to help with everything Will's and end-of-life admin. Take the first step in safeguarding you and your family's wishes for the future, and appoint your own power of attorney and executor today.

We provide a fixed-fee, affordable service which allows you to do so from the comfort of your own home. Our specialised affiliate law firm will be available to support at all stages, ensuring you fill out attorney documents correctly and write your Will in a way which will be validated in court.

Learn more with one of our experts via 1800 103 310 , or live chat now to get started.