Executor of will vs power of attorney – what’s the difference?

In the world of estate planning, there are two legal roles that often get confused: executor and attorney.

The former is responsible for carrying out the wishes of a deceased person as per their Will, whilst the latter is responsible for looking after a person’s money and welfare while they are still alive, usually where they have lost the mental capacity to make their own decisions.

In this blog, we will look in closer detail at each role, what it entails and the benefits of appointing both an executor and an attorney, to ensure that your wishes will be fulfilled no matter what happens.

What is an executor?

An executor is the person (or people) responsible for distributing the estate of a deceased person in accordance with the instructions in their Will. An executor will normally have been named by the person who has died as part of the process of writing their Will.

 If you don’t have a Will, then the person who is responsible for undertaking this task is called an Administrator. The Administrator of an estate is determined by the rules of intestacy..

You may also hear about a Personal Representative (PR) – this is often used as an umbrella term for executors or administrators.

Either way, there are certain aspects of the process that an executor or administrator cannot do, such as sell any property, withdraw certain funds, until they have been given the authority to do so by the Probate Registry. For executors, this is called the grant of probate and for Administrators, it is called the grant of letters of administration.

Responsibilities of an executor

An executor’s responsibilities can be complex and it is highly advisable to take legal advice if you have been appointed as the executor of somebody’s estate.

There are five main stages of the probate process, as follows:

• Immediately post-death

The executor will need to register the death (this must take place within five days of death) and establish whether the deceased has left any instructions that may impact on funeral arrangements.

• Valuing the estate

The executor will then have to make enquiries about the deceased’s assets and liabilities to come up with an accurate valuation figure for the HMRC inheritance tax (IHT) return.

Most assets will only be released following the grant of probate and payment of any IHT due on the estate, although some banks and building societies will release money to pay for a funeral, probate fees or IHT.

• Preparing the IHT return

Once the value of the deceased’s estate has been established, the executor will be responsible for preparing and submitting the IHT return to HMRC. Once the IHT is paid, HMRC will issue a confirmation of receipt which can then be used to apply to the Probate Registry for the grant of probate.

• Applying for probate

The grant of probate (or grant of letters of administration), once issued, will allow the executor to access the deceased’s assets in order to carry out the instructions contained in their Will.

•  Estate administration

Estate administration involves:

• Collecting in the deceased’s assets from bank accounts, investments, etc.
• Paying any debts the deceased had
• Distributing specific bequests to individuals
• Completing tax returns for any tax arising from the sale or disposal of assets
• Keeping careful records of all actions taken.

For a more detailed overview, please feel free to read our guide to the probate process.

What is an attorney?

An attorney is a representative chosen by somebody (called the ‘donor’) to act on their behalf if they lose the mental capacity to make their own decisions. The donor registers their choice of attorney (or attorneys) in a legal document called a Lasting Power of Attorney (LPA).

There are two main types of LPA, these being:

• Health and welfare – this enables your attorney to make decisions about your medical care, living arrangements and any other aspects of your personal health and wellbeing.

• Property and financial affairs – this enables your attorney to access your bank accounts, make payments on your behalf, and look after your pensions and benefits, amongst other things.

As mentioned previously, the main difference between an executor and an attorney is their remit to act – the former may only act once you have died, whilst the latter can step in to make decisions on your behalf whilst you are still alive.

A property and financial affairs power of attorney can be used whilst the donor still retains capacity. This can be useful if, say, they become unwell and are unable to get to the bank or otherwise manage their finances. However, a health and welfare power of attorney will only activate once the donor has been judged to lack the capacity to make decisions of their own.

Appointing an attorney

You must appoint your chosen attorney(s) whilst you are still able to make decisions for yourself. If you lose mental capacity (for example, due to a traumatic brain injury or dementia) and do not have an LPA in place, your loved ones will not automatically be given the right to manage your affairs on your behalf. Instead, they will have to apply to the Court of Protection to become your deputy instead, an expensive and often lengthy process that can leave family members in limbo for many months.

Responsibilities of an attorney

Any organisation that you deal with as an attorney may ask for proof that you have the legal authority to act on their behalf. You will usually have to show them the original LPA or a certified copy, in addition to other details such as your name, address or date of birth.

The Office of the Public Guardian (the official body responsible for overseeing LPAs) can check on your decisions at any time to ensure that you are acting in the donor’s best interests. If they find an attorney is abusing their power, they can investigate that individual and remove their right to manage the donor’s affairs.

In preparation for any such checks, you should keep records of any important decisions you make – for example, selling the donor’s home or agreeing to a particular course of medical treatment. You should also keep records of the donor’s assets, income and any expenditure you make on their behalf.

Attorneys are responsible for notifying the Office of the Public Guardian of any important changes in their or the donor’s circumstances, for example, address changes, the death of the donor or another attorney, or your decision to stop acting as an attorney.

Consulting the experts

Whilst the roles of executor and attorney are very different, they share one thing in common: they both come with significant responsibility and can be very complex to navigate. Therefore, it is always a good idea to seek expert legal advice if you are chosen to occupy either role.

At Attwaters Jameson Hill, our Wills, Trust and Probate team are on hand to support you whether you are making a Will or LPA or have been appointed as an executor or attorney. We can help you navigate through the complex application processes and to carry out your responsibilities, reducing the time and effort required from you and delivering full peace of mind to all parties involved.

Get in touch with us today on 0330 221 8855 or email enquiries@attwaters.co.uk to see how we can help.