Power of Attorney vs. Executor of a Will: What’s the Difference?

When planning for the future, it’s important to understand the legal roles that come into play regarding your finances, property, and personal affairs. Two key roles are the Power of Attorney and the Executor of a Will. While both are crucial in managing your affairs, they serve distinct purposes and operate at different stages of your life.

At Broadbents Solicitors, we often have questions from clients about the difference between these roles. In this post, we’ll explain what each role entails, when they are active, and how they function to ensure your wishes are respected.

A Power of Attorney (PoA) is a legal document that grants one or more individuals (known as your attorneys) the authority to make decisions on your behalf if you become unable to do so yourself. This could be due to illness, injury, or incapacity. A PoA is only effective during your lifetime, and you must have full mental capacity when you create it.

There are two main types of Power of Attorney in the UK:

1. Lasting Power of Attorney (LPA)

The most common form of PoA is the Lasting Power of Attorney, which can cover:

• Health and Welfare: Decisions regarding medical treatment, living arrangements, and day-to-day care.
• Property and Financial Affairs: Managing your bank accounts, paying bills, handling investments, and even selling property if necessary.

An LPA only comes into effect when you can no longer make decisions yourself, such as due to dementia or another debilitating condition. However, a Property and Financial Affairs LPA can also be used while you still have mental capacity, with your consent.

2. Ordinary Power of Attorney

An Ordinary Power of Attorney grants temporary authority to manage your financial affairs, typically used for specific situations where you need someone to act on your behalf, such as when you’re abroad for an extended period. Unlike an LPA, an Ordinary PoA becomes invalid if you lose mental capacity.

An Executor of a Will is an individual or institution responsible for managing your estate after you pass away. Their role is to ensure that your wishes, as outlined in your will, are followed and that your assets are distributed according to your instructions.

The responsibilities of an executor include:

• Applying for Probate: Probate is the legal process that allows the executor to manage and distribute your estate. They will need to apply for a Grant of Probate from the court to get the legal authority to act on your behalf.
• Paying Debts and Taxes: The executor is responsible for settling any outstanding debts or taxes from the estate, ensuring that the legal obligations are met before distributing the remaining assets.
• Distributing Assets: Once all liabilities are paid, the executor will distribute the remaining assets to the beneficiaries according to your will.

Unlike a PoA, an executor’s role only begins after your death, and they have no authority to act during your lifetime.

While both a Power of Attorney and an Executor are appointed to handle important matters on your behalf, they differ in significant ways:

1. When They Act

• Power of Attorney: The attorney only has authority to act while you are alive. Their role is typically activated when you become unable to make decisions for yourself (in the case of an LPA), or when you ask them to act temporarily (in the case of an Ordinary PoA).
• Executor of a Will: The executor’s role begins after your death. They cannot make any decisions or manage your affairs while you are still alive.

2. What They Manage

• Power of Attorney: Your attorney manages your day-to-day affairs, such as your finances, health care decisions, and property, but only while you are alive.
• Executor of a Will: The executor is responsible for dealing with your estate after you pass away, including paying debts, settling taxes, and distributing your assets to your beneficiaries.

3. When Their Authority Ends

• Power of Attorney: An attorney’s authority ends upon your death. At that point, the executor takes over in managing your estate.
• Executor of a Will: The executor’s role ends once they have completed the probate process and distributed the assets of your estate as per your will.

Yes, it’s possible for the same individual to be both your attorney and executor, but it’s important to understand that their responsibilities will only overlap when you pass away. While alive, your attorney will handle your affairs if you lose mental capacity, but once you die, their role ends, and they must switch to acting as your executor to manage your estate.

At Broadbents Solicitors, we advise clients to carefully consider who they appoint for both roles. The individuals you choose should be trustworthy, capable, and willing to act in your best interests. In some cases, it may make sense to appoint different people for each role, especially if the responsibilities of handling finances and estate administration are too overwhelming for one person.

Many people focus on creating a will to ensure their estate is managed according to their wishes after their death but overlook the importance of having a Power of Attorney in place during their lifetime. Without a PoA, if you become incapacitated, your loved ones may face difficulties accessing your finances or making crucial decisions about your care. In some cases, they may need to apply to the Court of Protection, which can be a lengthy and costly process.

Having both a well-drafted Lasting Power of Attorney and a will ensures that your wishes are respected, whether you are alive or after you’ve passed away.

At Broadbents Solicitors, we are experienced in helping clients set up both Powers of Attorney and wills. We provide expert guidance on:

• Choosing the right attorney or executor
• Drafting clear and legally sound documents
• Ensuring that your affairs are managed smoothly, whether you lose mental capacity or pass away

We can also assist executors with the probate process, ensuring that your estate is distributed according to your wishes without unnecessary delays. If you need help setting up a Power of Attorney, creating a will, or navigating the probate process, our team at Broadbents Solicitors is here to help. Contact us today for expert legal advice and peace of mind that your affairs are in safe hands. Give us a call on Alfreton: 01773 832 511 or Heanor : 01773 769 891. We also have an easy online enquiry form that you can complete, and we will be in touch with you as soon as possible.