Agents Under Powers of Attorney vs. Executors: Who Has Authority and When?

While similar in nature, there are significant differences between an Agent under a Power of Attorney (“POA”) and an Executor named in a Last Will and Testament (“Will”). An agent serving under a POA has power and authority to act as agent for the principal (the party who executed the POA) during the principal’s lifetime. An Executor, on the other hand, may only act upon the testator’s death (the person who executed the Will) once the testator’s Will has been admitted to probate by the Surrogate’s Court. The roles of Agent under a POA and Executor are distinct and will never be operative at the same time.

Agents under POA                                                                      

A POA creates a principal-agent relationship that is effective during the principal’s lifetime, unless revoked. Both the principal and the agent must sign the POA for the document to be effective in New York. The principal nominates agent(s) and grants those agent(s) specific powers and authority to execute financial transactions on behalf of the principal, which may be broad or limited to certain activities.

A POA is an important tool as it provides a principal with the security and convenience of knowing that the agent of his or her choosing can act on his or her behalf financially, when necessary. Executing a POA also circumvents the need for the lengthy, public and often costly process of seeking a court-appointed guardian of the property when a person becomes incapacitated and is unable to manage his or her financial affairs.

Executor

The Executor of an estate is nominated under a testator’s Will.  An Executor does not have legal authority to act in such role until after the testator’s death (decedent) and after the Will has been admitted to probate. Once a Will is formally admitted to probate, an Executor can proceed with administering a decedent’s estate. An Executor is tasked with collecting and managing a decedent’s assets, paying the debts or expenses of the decedent and estate, and making final distributions of assets to estate beneficiaries.

An Executor is essential to an estate administration. Thus, it is important for a testator to appoint a person who can commit himself or herself to the role.