Wednesday, June 10, 2015
I've Named my Executor. Do I also need a Power of Attorney?
Someday you will no longer be able to attend to your own personal and financial affairs. This may be because you are alive but incapacitated. Or it may be because of your death.
When that time comes your assets will still need to be managed and your bills and taxes paid. Someone is going to need the authority 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 authorize a surrogate to handle things for them are Wills and Powers of Attorney. It’s important to understand that these documents work in different time frames. And that 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." Even though named in your Will, 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 PA’s New Law on Powers of Attorney: What You Need to Know