Thursday, August 16, 2012

What is the Difference between my Power of Attorney and my Executor

Someday, you will no longer be able to attend to your own personal and financial affairs. This may be because you become incapacitated at some point during your life, and someday, of course, we will all die. When you are no longer able to handle your affairs yourself due to incapacity or death, someone needs to step in and take care of things for you. 

You can choose who you want to act on your behalf when you are no longer capable yourself. The main two legal documents people use to name a surrogate to handle things for them are Wills and Powers of Attorney. Its important to understand that these documents work in different time frames.  You need both. 

An Executor is the person you name in your Will to take care of your affairs after you die. A Power of Attorney names a person, often called your agent or attorney-in-fact, to handle matters for you while you are alive.

Generally speaking, your Power of Attorney ceases to be effective at the moment of your death. Your agent can only take care of your affairs while you are alive. After your death, your Executor should take over.  In order to get authority, your Executor must file a death certificate, your Will, and other legal papers with a court official in a proceeding called "probate." Your Executor has no authority to act for you while you are alive. 

This means that people need have both a Power of Attorney (Agent) to give someone authority to act for them during life, and a Will (Executor) to name someone to wind up your affairs after you are gone.

For more information on Powers of Attorney see my recent blog post Powers of Attorney: Things You Need to Know.  

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