Difference of Power of Attorney & Executor of Will

By Larissa Bodniowycz, J.D.

Difference of Power of Attorney & Executor of Will

By Larissa Bodniowycz, J.D.

An executor of a will and a person with power of attorney are both persons appointed to help another person manage their finances and affairs when they cannot. A power of attorney handles affairs while someone is alive, while an executor of a will handles affairs after someone's death.

Man and woman shaking hands

Power of Attorney

A power of attorney is a legally binding document that grants one person, called an agent, the authority to act on behalf of another person, called the principal. The agent holds the power of attorney for the principal.

By default, a power of attorney grants the agent broad power to take almost any action that the principal can take. The agent essentially steps into the principal's shoes and makes important decisions. For example, the agent can open and close and make deposits and withdrawals from a bank account in the principal's name.

The principal can narrow the powers of the agent by drafting a more limited power of attorney. The type of actions an agent can take may be limited, or the agent's powers might be limited to a single event or time period. For example, a power of attorney can grant an agent the power to sign real estate closing documents on behalf of a principal but terminate immediately after the transaction.

A principal can draft a power of attorney to terminate upon the incapacity of the principal or to continue in effect after the principal's incapacity. Those that continue after the principal's incapacity are called durable powers of attorney. As long as the principal has capacity, they can revoke their power of attorney at any time. All powers of attorney terminate when the principal dies.

Executor of Will

When a person dies with a will, someone must carry out the directions in the will after their death. For example, if a will leaves a certain amount of money to a survivor, someone needs to transfer the funds from the deceased's account to the survivor's account. That person is called the executor of the will.

In most cases, an individual will name an executor in their will as well as at least one back-up person who can serve as the executor if the first choice executor cannot or does not want to serve. If no executor is named in the will, there are laws in each state that specify who should act as the executor. Even though an individual usually names the executor before their death, the executor has no power to act until the person dies.

During their lifetime, a person can amend their will to change the executor. After their death, only a court can change the executor. A court changes the executor if the executor does not act in the deceased's best interests and in accordance with the deceased's will.

A common estate-planning question is whether an executor or power of attorney is necessary. In most cases, the answer is that both are necessary because they do different jobs. Appointing an executor in your will allows you to choose someone you trust to carry out your last wishes. Creating a durable power of attorney ensures that someone you trust manages your affairs when you are alive but unable to make your own decisions.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.