Power of Attorney vs Executor: Who Really Controls Your Money?
Many people believe that appointing an “Executor” in their Will covers everything. It does not. Your Executor has zero power while you are alive—even if you are in a coma. Conversely, your Power of Attorney (POA) has total power while you are alive, but their authority vanishes instantly the moment you die. Understanding this “Baton Pass” is critical. If you have a Will but no POA, and you suffer a stroke, your family is locked out of your bank accounts. Here is how to ensure someone is at the wheel during both life and death.
The Baton Pass: Your Power of Attorney manages your life (Left). Your Executor manages your legacy (Right). They never hold power at the same time.
Image Source: bestmoneytip.com
1. The “Baton Pass”: When Does Power Switch?
Think of this as a relay race. The handoff happens at the moment of death.
2. Comparison: Different Jobs, Different Rules
They are both “agents,” but their job descriptions are opposites.
| Feature | Power of Attorney (POA) | Executor / Trustee |
|---|---|---|
| When Active? | While you are ALIVE | After you are DEAD |
| Primary Job | Keep you alive, pay your bills. | Close your estate, distribute money. |
| Fiduciary Duty? | Yes (Must act in your best interest) | Yes (Must follow the Will/Trust) |
| Authority Ends | At Death | When Estate Closes |
3. The Two Types of POA You Need
You cannot just say “I want a POA.” You need to specify the scope.
- Also called: Advance Directive, Health Care Proxy.
- Powers: Talk to doctors, view medical records, make life-support decisions (DNR).
- Note: Without this, doctors cannot legally discuss your condition with your family (HIPAA laws).
- Also called: Durable Power of Attorney.
- Powers: Access bank accounts, pay mortgage, file taxes, sell property.
- Critical: Must be “Durable” so it remains valid if you become mentally incapacitated.
4. What If You Don’t Have a POA?
If you have a stroke and no Financial POA, your family cannot access your money to pay for your care.
• Cost: $5,000 – $10,000+.
• Public: You are declared incompetent in public records.
• Solution: A $100 POA document prevents this entirely.