Power of Attorney vs. Executor: Estate Planning Basics

What is a power of attorney?

A power of attorney is a legally binding document that grants one person, called an agent or attorney-in-fact, the authority to act on behalf of another person, called the principal. The agent holds the power of attorney for the principal. For the power of attorney to be enforceable, the principal drafts a contract that lays out the agent’s specific powers and the time frame for those powers; then, the document is signed.

By default, a power of attorney grants the agent broad power to take most actions that the principal can take. The agent essentially steps into the principal's shoes and makes important decisions. This is why it is crucial for the principal to note which responsibilities are specifically covered in the power-of-attorney agreement. For example, the agent could be granted the power to 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 types 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, an agent could be granted the power of attorney to handle certain legal matters like signing real estate closing documents on behalf of a principal, but once the transaction is complete, their power of attorney ceases.

Different powers of attorney have different features. 

• Durable: Continues after the principal's incapacity. Most powers of attorney are durable.
• Non-durable: Terminates in the event that the principal becomes incapacitated. 
• Medical: Grants an agent the power to make healthcare-related decisions for the principal; often a springing power of attorney, meaning that the powers begin at a predetermined event, like the principal’s incapacity.
• Financial: Limits the agent’s powers to financial transactions and decisions; can be either durable or non-durable.

As long as the principal has mental capacity, they can revoke their power of attorney at any time. All powers of attorney terminate when the principal dies.

What is an executor?

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 surviving beneficiary, someone needs to transfer the deceased's assets to the survivor. The person who has this responsibility 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 backup person who can serve as the executor if their first choice cannot or does not want to serve. If no executor is named in the will, there are typically 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.

An executor’s duties involve locating the will, filing it with the local probate court, notifying beneficiaries, paying outstanding debts and taxes owed, distributing the remaining assets, and carrying out the deceased’s wishes laid out in the will.

During their lifetime, a person can amend their will to change the executor. After their death, however, changing the executor must get court approval. Beneficiaries of the deceased’s estate can submit an appeal to the local probate court to appoint a new executor if they believe that the executor is not acting in the deceased's best interests and in accordance with the deceased's will. Additionally, an executor named in the deceased’s will can refuse to take on the role when the time comes; in this case, the court will appoint a new executor who is often a surviving spouse or other close relative.

Should power of attorney and executor be the same person?

Oftentimes, the executor of an estate and the person with power of attorney are one and the same. Many people choose one trusted family member or friend to take on both roles, but there may be advantages and drawbacks to this decision.

Pros 

• The executor’s prior understanding of the principal’s legal, medical, or financial affairs may streamline the process of administering the will.
• Designating the same person can enhance consistency in decisions during and after the life of the individual.

Cons

• Depending on the scope of their responsibilities as an agent during the principal’s life, the executor may experience burnout with their new role, especially if estate management is complex.
• There may be potential conflicts of interest when making power-of-attorney decisions, especially if the agent (and eventual executor) is a beneficiary of the principal’s estate. 

If you want to use the same person, discuss this option with them ahead of time to ensure that they have the knowledge, experience, and bandwidth to take on both roles. Another good practice is to appoint a backup power of attorney and executor, just in case your first choice cannot or will not assume the role. Additionally, most states allow individuals to designate more than one power-of-attorney agent or executor of a will, which can act as a checks and balances system in decision-making.

How to choose the right person for each role

When selecting an executor vs. power of attorney, many of the same attributes apply, like trustworthiness, availability, organizational skills, and the ability to remain impartial. But there are some traits to look for that are specific to each role. 

For example, a person with power of attorney should be able to make tough decisions for you in good faith and ideally has experience in the specific area noted in the power-of-attorney document, such as medical, financial, or legal expertise. An executor of a will should have the financial and/or legal literacy needed to help with navigating potentially complex estates. 

When you’re ready to future-proof your estate, lean on LegalZoom’s estate planning services to guide you through the process. Our network of attorneys can also help review your documents to make sure that they reflect your wishes and effectively safeguard your estate’s assets.

FAQs 

What happens if no one is named a power of attorney or an executor of will?

If an individual becomes incapacitated and they haven’t given anyone the legal power of attorney to make decisions on their behalf, the court will appoint someone to manage the individual’s affairs, which is known as a conservatorship. Similarly, if an individual dies without having designated someone as the executor of their will, the court will give someone these responsibilities. For instance, in California, local probate courts will appoint someone (often a family member) to take on the role of executor if no one is named in the will or if there is no will.

In both cases, the local probate court will become involved, which can create a lengthy, more stressful probate process for loved ones during an already fraught time. This is why it is a best practice for individuals to designate a power-of-attorney agent and an executor of their will before the need arises.

Who has more authority: a power of attorney or an executor?

Regarding power of attorney vs. executor, it’s not really a question of who has the most authority—rather what type of authority are they granted and when? They are different roles that occur at different times: The power of attorney occurs during a person’s life, while a will is executed upon their death. The scope of both roles varies depending on the responsibilities laid out in their respective legal documents. 

Can a power of attorney make decisions about the will?

No, a person with power of attorney can only make decisions about certain predetermined matters during the principal’s lifetime. Only the principal makes decisions about their will, which are then fulfilled by the executor upon the principal’s death.

Do I need both a power of attorney and an executor?

It’s a good idea to designate someone with power of attorney as well as an executor of your estate. Doing so ensures that a trusted family member or friend makes important financial, legal, and/or healthcare decisions on your behalf if you become incapacitated and carries out your final wishes in your will when you die—both important aspects of effective estate planning.