Are Powers of Attorney the same thing as an Executor? No, and here’s a guide to the differences between them.
If you want to skip to the Key Takeaways, just scroll to the bottom for the TLDR!
First things, first – let’s talk about your people
Family is the most important thing – or is it?
Your people are one of your greatest resources in life. Whether they are in your life because they are family or friends doesn’t matter. Having people in your life that you can share joys and pain with, laugh or cry with, or even just sit in silence with, is fundamental to your physical and mental health.
Some of these people will be there for you in your times of need. Some won’t. And that’s okay. But it’s important to recognize the difference between the person who can play bridge with you, or go for coffee at Timmy’s, and the person who will show up at 2:00 in the morning when you have fallen on your way to the toilet.
You might want particular people to help you with certain things – for example, maybe your sibling would be better at helping you with health care decisions than your spouse would. Maybe your grandchild would be better at balancing your chequebook than your spouse would.
And while they love you, your people they might not have the emotional or technical ability to help you with your affairs should you need it.
So it’s important to think about what you might need for help throughout your life, and which people you could ask to help you get through those situations where you might need help.
What are these people called?
We give the people you ask to help you special names, depending on the work you are asking them to do for you.
An Executor is the person who looks after your estate after you have died.
An Attorney is the person who helps you with your legal and financial affairs while you are still alive. Don’t be thrown off by the word “attorney” – this doesn’t mean a lawyer, like you hear Americans say on tv. In Canada, when we use the word “Attorney”, we mean “agent”, or “helper”, not lawyer.
A Representative is the person who helps you with your health care and personal care needs while you are still alive.
Now let’s talk paperwork
Your people can’t do anything without the right powers. So let’s talk about how you get your people these powers. You start with estate planning.
Great! Now what does that mean?
Estate planning is your emergency plan – your “Plan B”. What happens if you get sick, or when you die? Who should we, as outsiders, be listening to, and what do you want these people to do with you and your things? You create your estate plan using various documents that tell others what to do, and who to listen to.
Two important parts of estate planning are Powers of Attorney and Wills. There’s also a third part, called Representation Agreements. We’ll talk about Representation Agreements in more detail elsewhere.
In this article, we’ll talk about how Powers of Attorney and Wills are different, and why you care.
Let’s do a quick review of the basics.
Powers of Attorney
A Power of Attorney is a document that names a person to help you deal with your money if you become incapable. Powers of Attorney are only used while you are alive. The person you name in this document is called an Attorney.
Wills
A Will is a document that names a person to look after certain of your financial affairs after you die. Wills can only be used after you died. The person you name in this document is called an Executor.
Representation Agreements
A Representation Agreement (and specifically a Section 9 Representation Agreement) is a document that names someone to look after your health care and personal care needs while you are still alive. The person you name in this document is called a Representative.
Here’s a little summary:
Wills
Deals with assets after you die.
- used only after you have died
- tells us who will manage certain of your assets (your Executor)
- tells us who will inherit your estate (your Beneficiaries)
- gives your executor powers they need to do their job properly
Powers of Attorney
Deals with assets while you are alive.
- used only while you are alive
- dies when you die
- tells us who can deal with your financial affairs if you get sick
Representation Agreements
Deals with health care and personal care (not assets!).
- used only while you are alive
- dies when you die
- tells us who can deal with your health care and personal care if you get sick
The first difference between a Power of Attorney and an Executor
So the first difference between a Power of Attorney and an Executor is that a power of attorney is a document, and an Executor is a person.
You name an Attorney in a Power of Attorney. You name an Executor in your Will. We want to compare apples to apples, so let’s compare two of these roles your people might play in your life – Executor and Attorney.
Comparing Executors and Attorneys
An Executor and an Attorney are actually very similar things.
One big difference between them is that one (the Attorney) does their work for you while you are still alive, and the other (the Executor) does their work for you after you have died.
Client Story
Robin worried she would end up with dementia. Her family had a history of it. She wanted to make sure that if she did end up with dementia, her son could help make sure her bills were paid and she was properly looked after until she died. Robin named her son as her Attorney under a Power of Attorney, so he had the power to help her when and if she needed it. She then named her son to be her Executor in her Will, so he could wind up her estate after she passed away.
Timing Differences Between an Attorney and Executor
One big difference between an Attorney and an Executor is in when they help you.
An Attorney works for you during your lifetime. Their authority ends when you die.
An Executor’s duties start immediately after you pass away. Your Will only takes effect when you die, and that’s the document that appoints your Executor, so we have to wait until you pass before we can say that this Will is your last Will.
Scope of authority
Another big difference between an Attorney and an Executor is their “scope of authority” – the work you are asking them to do.
Here’s a short (not exhaustive) comparison of the roles:
Executor
Deals with things after you die, focusing on your beneficiaries.
- arranges the disposition of your remains, and any funeral
- safeguards your assets for the beneficiaries’ benefit until they can finish winding up your estate
- notifies people you have died
- makes sure your taxes are all finalized and paid
- sorts out your list of debts and makes a plan for how to get those paid
- gets a grant of probate, if needed
- sells any assets that need to be sold
- sort out the distribution of your personal effects
- accounts to your beneficiaries
- distributes funds to your beneficiaries
Attorney
Deals with your assets while you are alive, focusing on your needs first and foremost.
- makes a list of your assets and liabilities and keeps that list up to date throughout your lifetime
- helps you safeguard your assets
- helps you file and pay your taxes
- keeps a diary of the work they do for you
- keeps copies of statements for your bank accounts and other investments
- accounts to you during your lifetime, and provides a final report to your estate when you pass away
- helps you pay your bills
- helps you carry out your legal obligations to others
Can the Same Person Serve as Attorney and Executor?
Yes.
In fact, it’s quite common for the same person to be your Attorney and your Executor.
You might want to consider using different people for these roles if:
- the person you want to name will not be in a great place mentally after you die (and thus unable to manage your estate)
- the person you are thinking of naming as your Executor might die before you
It’s absolutely possible for you to name different people for these roles if you feel that would be appropriate.
You can even name two people to work together for these roles if you like, but please be practical about this. The more people you name, the harder it is to deal with logistics.
Client Story
Sharon didn’t want to offend any of her children, or leave anyone out when she was thinking about who to name as her Executors. But her kids lived quite far apart from each other, and it would have been difficult for them to work together easily.
They would have needed to travel to do some of the work together, and some things required them all to sign off on the paperwork. It would have made it much harder for them to do this work in the midst of their grief.
Planning Ahead: Why Both Roles Matter
Good estate planning involves appointing both an Attorney and an Executor.
They are similar, but slightly different roles, working for you or your estate at different times. Giving someone these powers mean you will be protected, but your estate will also be protected for you and for your beneficiaries.
Failing to give your people the power they need to do the job you are asking them to do is unfair to them, and might lead to them simply not doing the work for you at all. Please don’t make this already hard job even harder for them. Give them the respect and the tools they need to do the work properly for you.
Conclusion
In conclusion, while an Attorney and an Executor share similarities, in that they involve trusted individuals acting on behalf of another, they serve distinct purposes and operate at different stages of estate planning.
Understanding the differences between a Attorney and an Executor is essential for people seeking to manage their affairs effectively and ensure their wishes are properly carried out.
Ask your BC Notary to help you create a great estate plan that will protect you, your family and your assets.
Key Takeaways
- A Power of Attorney is used while you are alive, and ceases to be effective when you die. It dies with you.
- A Will is used only after you have died, and it appoints an Executor to carry out your wishes and wind up your estate.
- The same person can serve as both Attorney and Executor if you want, but you can use different people for these roles if you think that would be better.
- You can name more than one person as your Attorney or Executor, but be careful about logistics – these are complicated roles, and your people need to be able to work together well.
Client stories are true, but the names of the people have been changed to protect privacy.