Executor vs Power of Attorney: What Each Do & How They Differ
So you’ve been appointed as Executor of a Will. Or was it the Power of Attorney? Are you both, at the same time? And what on earth are you meant to be doing now? We clear up the confusion cloud engulfing these two distinct legal roles. Because while both involve managing someone’s affairs, there's very different scope, processes and responsibilities involved in each.
Let's start with power of attorney:
The What: A Legal Document which allows someone (the principle) to appoint someone else (the attorney-in-fact) to act on their behalf in financial or legal matters.
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
The Where: Appointed by the principle and active whilst they’re still alive, via a POA document
The How: The scope of responsibilities depends on whether the POA is general, limited or enduring. Each have different authorities to make financial or medical decisions on the principal's behalf.
Now Executor of Will:
The What: An appointed person legally responsible for managing the affairs and carrying out instructions of someone (the testator) after they die
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
The Where: Appointed by the testator when they wrote their will, and active only after the testator dies
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 resume as soon as you’ve all crossed the i’s and dotted the t’s on the legal document. This means, whether due to the principal's ill health or jetting away abroad, you could 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 it cruisy whilst your testator is still alive. You might even mildly forget about the role. But when the testator dies, as executor your 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 you're a general POA 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, or are seen the same in the eyes of the law . And if you are appointed as both, you’ll need to fulfil the duties as both an executor and an attorney-in-fact separately.
Theres 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.
Do you want to safeguard your future wishes 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.
Chat to one of our experts via 1800 103 310 , or live chat now to get started.