Power of Attorney vs. Executor

Power of Attorney

• The power of attorney is a legal document that enables an agent to act on your behalf. Powers of attorney may be general or specific. Specific powers of attorney only cover a limited set of duties -- you could create a power of attorney that would allow an agent to withdraw money from a specific bank account to pay for a specific expense, for example, but it would not allow the agent to do anything else. General powers of attorney can be particularly broad, enabling your agent to do any lawful act that you could do yourself. A power of attorney is only effective while you are still alive; if you die, the agent no longer has authority to act on your behalf.
  
  

Executors

• An executor is responsible for administrating and winding up a decedent’s estate. Executor powers are similar to those of a power of attorney, but an executor’s authority springs from the probate court and only takes effect when a person dies. Executor duties are also limited to handling the decedent’s affairs. This includes paying off valid debts, taking inventory of and valuing the decedent’s property and distributing it to the decedent’s heirs.
  
  

Contingency Planning

• Power of attorney and an executor are two important aspects to consider when planning for contingencies or planning your estate. A power of attorney is useful if you become sick or disabled; for example. If you cannot physically act, your agent can handle your affairs under a valid power of attorney while you recover. Your executor is crucial for the swift and smooth distribution of your estate when you pass away. A responsible and competent executor can help shorten the probate process and ensure that your heirs and beneficiaries receive their inheritances.
  
  

Other Issues

• Appointing a power of attorney and naming an executor are legal processes that require legal documents. The wording in the legal documents must be precise and unambiguous. You may need legal representation to complete the documents. When choosing an agent or an executor, consider the responsibility and authority you are meting out. Agents and executors must be financial responsible, trustworthy individuals who will look out for your best interests.