Executor vs. Power of Attorney

A power of attorney (POA) and executor of a will can help you carry out your wishes, albeit in different ways. While a POA is effective in your lifetime, the executor performs their core responsibilities after your passing. Both impact your goals significantly. Understanding their differences, when to use one and how to choose the right person is essential. This article breaks down the responsibilities and implications of each and points to remember when working with one.

Overview

As a high-level summary, here’s a side-by-side comparison of the power of attorney and executor of an estate:

What Is an Executor?

An executor manages the testator’s estate after death. The testator is a person who writes a will. The estate pertains to all the assets of the testator. If the testator does not appoint an executor, a court may appoint one, called an administrator. An administrator has the same duties as an executor.

Executors can be family members, close friends or third parties — for instance, attorneys. In Pennsylvania, they can be anyone 18 or older who is of sound mind. Testators can also appoint multiple executors, with one serving as a backup in case the other is unable to perform their duties. Co-executors can also share the responsibilities.

Executors are essential in estate planning. They manage the testator’s financial affairs after their passing, including filing taxes and paying creditors. They also ensure beneficiaries — persons entitled to the assets — get what is rightfully theirs.

Executor Responsibilities

The executor’s primary duties include carrying out what’s listed in the will. Although official duties begin after the testator’s passing, executors still have a few responsibilities before the testator’s death, which include:

• Learning the location of and how to access the original will.
• Ensuring the testator provides a list of assets and debts.
• Securing a copy or knowing the location of essential documents.
• Understanding the testator’s funeral or memorial service instructions, if the testator wants the executor to handle these arrangements.

After the testator’s passing, the executor’s responsibilities include, but are not limited to:

• Submitting the will for probate, depending on the estate size.
• Getting accurate asset valuations.
• Informing relevant government agencies and other parties of the testator’s passing.
• Managing debts and taxes.
• Distributing the assets to the beneficiaries.

The responsibilities can be hefty and time-consuming, especially for large estates. Executors can enlist the help of professionals to handle some of the responsibilities. For instance, a certified public accountant (CPA) can make tax preparations easier. Having an administration attorney assist the executor can streamline the process, as they have the background and experience in handling these tasks.

If the testator has assets in a trust, the executor may not be able to manage them. A trust and a will play different roles. A trust is a legal arrangement in which one person, a grantor, gives control of assets to another person, the trustee, to manage and use for the benefit of a third person, the beneficiary. The executor must be listed as the trustee to have authority over trust assets.

While a trustee, executor and power of attorney all help a person fulfill their wishes, their responsibilities differ in the scope of their work.

How to Remove an Executor

Testators or the court can remove an executor for multiple reasons. The executor may have:

• Passed away before the testator.
• Changed their mind about handling the responsibilities.
• Failed to carry out the will or cooperate with the beneficiaries.
• Conflicts of interest that prevent them from performing their duties.

Testators can remove executors by modifying a will or drafting an entirely new will. In the latter case, the testator must destroy the original will to avoid challenges to the validity of the new will.

Family members or beneficiaries who want to remove an executor may need to petition the probate court. Probate is the court process of managing a decedent’s estate, which typically ends with distributing a person’s assets. The process starts with the court approving the named executor or appointing an administrator if there is no will.

The person who petitions the court may need to cover the fees, unless the judge allows the estate to pay. The person also needs to justify the change request, for instance, by providing proof of misconduct.

What Is a Power of Attorney?

A POA is a legal document that lets a person act on behalf of another. The appointed person, known as an agent or attorney-in-fact, becomes a substitute decision-maker for the principal, the person appointing the agent. The document highlights the actions agents can take, the execution date and how long the agent will have such authority. The agent must sign the document, along with the principal or the person appointing the agent.

Because a POA can give an agent significant authority over your assets, it’s essential to only ever appoint an agent you trust completely. Generally, any adult who’s not incapacitated can be an agent, but requirements vary per state. The POA can stay in effect even if you move states.

Like executors, the agent should understand the principal’s wishes so the decisions align with their goals. Principals can name multiple agents, which can be convenient when one agent cannot act on the principal’s behalf.

Power of Attorney Types and Responsibilities

Various POA types have different agent responsibilities and are good for different situations:

• Durable power of attorney: A durable POA lets another person make a decision for you if you become incapacitated or your mental capacity declines. This includes deciding on legal, financial and health-related matters.
• Springing power of attorney: A springing POA is conditional, where a specified event must occur before the agent can exercise their power.
• General power of attorney: A general POA offers broad decision-making authority to an agent, often including most actions a principal may perform.
• Limited power of attorney: A limited POA lets an agent make decisions on specific matters. For example, the agent may be appointed to handle a particular real estate transaction or manage a specific bank account.

How to Remove a Power of Attorney

Although POAs may include termination dates, principals can revoke the POA at any time. A principal may need to write a revocation notice and provide copies to relevant parties, such as medical providers and financial institutions.

A principal can also update a POA if their circumstances change. The new document should state that it revokes the former POA. Documents must be signed, dated and notarized.

Frequently Asked Questions

The following questions and answers can help you further understand how the power of attorney is not the same as an executor:

Does a power of attorney have more power than an executor?

A POA does not have more power than an executor, as their responsibilities differ. An agent’s scope of authority depends on the POA type and what’s listed in the document. An executor’s primary responsibility lies in following statutory guidelines and what’s in a testator’s will.

Can an executor be a beneficiary?

Yes, an executor can be a beneficiary. Testators usually appoint family members or close friends as executors. This does not necessarily create a conflict of interest, but if other beneficiaries believe the executor is failing in their duties, they can petition to remove the executor in court.

Can your attorney serve as your executor?

While you can legally appoint attorneys as executors, not all attorneys offer executor services. Instead, many law firms, like MPL Law, offer probate and estate administration services to help testators or executors manage estate assets and debts. Hiring experienced attorneys can lessen the burden on grieving family members.

When does a power of attorney end and an executor begin?

A POA ends on its termination date or when the principal dies. The executors’ core responsibilities begin after the testator’s death, although they should discuss the will before the testator’s passing.

Why Trust MPL Law

MPL Law is a firm dedicated to helping residents in York, Pennsylvania, with their legal needs. As a firm practicing in the state for over 30 years, we’ve accumulated experience in estate planning, real estate, family law and criminal defense, among other matters. With our personalized approach, we take the time to listen and understand your specific needs. Depending on your situation, we’ll help you achieve the optimum results.

Create the Right Plan With MPL Law

At MPL Law, we’ll help you create the right plan depending on your goals. Whether you need to create powers of attorney documents or appoint an executor to manage your estate, we can help you out. We understand you need a person you can trust. Plus, thorough planning is essential in ensuring your wishes are fulfilled. To protect your future and your hard-earned assets, you can count on our experienced lawyers. Schedule a consultation today to get started.