When you’re making your estate plans, it’s important to understand the difference between the role of an attorney-in-fact under a power of attorney and an executor under a Will. While both involve appointing another person to carry out your wishes, their duties are slightly different and carried out at different times.
Read on to discover more about each of these essential estate planning designations and what to consider when drafting a Will or power of attorney.
What is an executor of a Will?
An executor carries out the wishes designated in an individual’s Last Will and Testament, (often called a “Will” for short), after their death. An executor is named in the written Will by the testator, who is the person to whom the Will belongs. When the Will is drafted, an individual may appoint co-executors to serve together, or appoint a primary and then an alternate, secondary executor. A person can amend their Will to change their named executor as many times as they want during their lifetime. After death, though, if the named executors are not alive to serve or decline to serve, then a court must appoint someone to replace them in order to ensure the wishes of the deceased person, as expressed in the Will, are carried out. When a person is appointed by the court, and not named in the Will, they are called a personal administrator.
What is a power of attorney?
A power of attorney (POA) is a legal document granting an individual, known as an “agent-in-fact” or “attorney-in-fact” or a “personal representative,” the legal right to make medical or financial decisions for another person, known as the principal, during the principal’s lifetime.
Under a POA, the attorney-in-fact has the capacity to act on behalf of a living principal where they cannot make decisions for themselves, such as in the case of incapacitation. The attorney-in-fact can have as much or as little hold over decisions as the principal allows. For example, you can allow your attorney-in-fact to have decision-making power over all of your financial affairs or give them the power to simply act on your behalf during the closing sale of a home.
What is the difference between a will executor and an attorney-in-fact?
The biggest difference between an executor and an attorney-in-fact is that the latter’s power to act on behalf of the principal exists only while the principal is still alive; once she or he dies, then all power to manage the estate of the deceased person passes to his or her executor under the Will. As soon as you die, your POA expires with your death, and the Will executor’s powers begin under your Will.
A POA is generally enforced if you are mentally or physically incapacitated and cannot make decisions for yourself. In this case, the designated attorney-in-fact will be able to carry out medical and financial decisions on your behalf. Once you pass, however, the appointed executor will carry out your wishes you have outlined in your Will.
Can an executor and an attorney-in-fact be the same person?
Yes, you can appoint the same person to be your Will executor and your attorney-in-fact. Many people choose this avenue since it’s a natural transition between making decisions for you in life and then carrying out your wishes after death. For example, an individual’s spouse or adult child can help them make financial decisions while they’re medically too incapacitated to manage their financial matters; and, if they die, that same spouse or child can then step in to administer the terms of their Will as the executor. For purposes of Probate, this is often the ideal way to handle matters in Virginia if the person who will be the beneficiary of your Will is also serving as the executor of your Will.
Considerations for choosing an executor
When choosing an executor, it’s important to choose someone who is up for the responsibility of handling the administrative paperwork it demands as well as fulfilling the wishes expressed by you in your Will. If your beneficiary is your sole beneficiary; however, it may be wise to also name them as the executor if they are an adult due to the fact that Virginia provides for expedited probate when the beneficiary is serving in both roles. If you can’t name your beneficiary to serve as the Executor, make sure to choose someone who will be able to go through the probate process and who you’re certain will be able to uphold your final wishes. You do not have to choose a family member and it is recommended that this individual has a good financial standing and is in good health.
Considerations for choosing an attorney-in-fact
It is absolutely vital that you choose carefully when appointing your attorney-at-fact in a POA agreement. This individual will have the power and accessibility to make crucial financial decisions on your behalf, which makes trusting this person a crucial component. Choose someone who is in good legal standing to be making these decisions for you. Rethink your decision if you’re unsure of whether a person will take advantage of the POA to benefit themselves.
Need help preparing a Will, power of attorney, or other estate planning document? Contact the Law Office of Patricia E. Tichenor to schedule a complimentary consultation with our experienced Virginia-based principal attorney.