24 Feb Power of Attorney vs Executor
Have you ever wondered what the difference is?
I imagine many people have heard of both, but may not always understand what the difference is. So here goes…
Power of Attorney is relevant in the decision making process when you are alive, and unable to make decisions for yourself. More specifically, dependent upon what areas you’ve granted your agent power of attorney for, the role requires this individual make decisions regarding finances, legal and medical.
There are two types of power or attorney, springing and durable. A durable power of attorney allows your agent to make decisions now, whereas the springing power of attorney, this would come into effect only when conditions that you outline are satisfied. These conditions are often related to your medical condition(s) and inability to make your own decisions, as deemed by a physician.
Executor of the estate comes into play after you have died, and has a very specific mandate, which is to make sure there’s enough money in the estate to pay off any debts, close out your affairs, satisfy the wishes in your will and ensure that monies are distributed to your heirs.
Given the differences in the role, and lack of overlap, often you can appoint the same individual to take on these roles. Many people find that their adult child or other trusted relative will have their best interest in mind.
Finally, while it may make sense to designate one person to this role, it is recommended that you check with them prior to make sure they have the time and ability to take this on, as both are time consuming and come with a lot of responsibility. A legal consultation may be required.
Want to learn more about selecting an agent for Power of Attorney and an Executor?