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What Is The Difference Between Power Of Attorney And An Executor In Canada?

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    An important factor when you’re planning for darker days is deciding who you want to be responsible for taking care of business when you no longer can. That doesn’t just mean when you’re dead and gone—there may come a time when you’re not able to make your own decisions. In those cases, a written, legal document called a power of attorney authorizes someone to make legal, health care, and financial decisions on your behalf. 

    This article will answer some of the most common questions about the differences between powers of attorney and executors, what those jobs entail, and who you should consider when making your final arrangements.

    What Is The Difference Between Power Of Attorney And Executor In Canada?

    An executor’s job is to act on behalf of your estate after your death. They take care of probate, pay your final taxes, and distribute your assets to your beneficiaries. A power of attorney has the legal authority to act on your behalf while you’re still alive but aren’t capable of handling your own affairs. They make decisions around care arrangements and personal and financial affairs.

    The Different Types Of Powers Of Attorney

    You can appoint different people to oversee different things. For example, with Willful, you can choose one attorney to oversee your personal care and medical decisions, and another to manage your property and financial matters. Alternatively, you can appoint the same individual to manage both personal and financial decisions, or even create a special power of attorney document with specific limitations on an attorney's authority.

    Depending on the province you live in, the power of attorney document may be called something different. For example, it would be called a “mandate” in Quebec, and a power of attorney for healthcare may be referred to as a healthcare proxy, healthcare representative, or medical power of attorney. The “attorney” may also be called a “representative” or “agent”.  

    What Is More Important, Power Of Attorney Or Executor?

    They’re both very important jobs, but they come with quite different duties. You might not end up needing a power of attorney, but if you do, you’ll be glad someone’s taking care of your health and finances. If you’re lying in a hospital bed incapacitated, you won’t be able to make  important decisions about your care or make sure that the mortgage and bills are being paid.

    In contrast, the executor’s job is a ‘when’ not an ‘if’ situation. After your death, your executor will administer your estate according to your last will and testament as per your final wishes. Both jobs are incredibly important, just at different times.

    Check two items off at once. Designate your power of attorney and executor when you write your will with Willful →

    What Makes Someone A Good Executor?

    For executors, going through probate and administering an estate and its assets is very time consuming and involves a lot of paperwork and attention to detail. This is why executor are often compensated for their work through executor fees. This person should ideally be organized and adept at financial administrative tasks like paying bills and taxes, and comfortable communicating with your beneficiaries.

    What Makes Someone A Good Power Of Attorney?

    Powers of attorney are ideally calm under pressure, geographically close to you, and good at decision making. It’s also helpful if they understand your business interests and investments and know where your money is kept. 

    For example, if you own a small business, there’s a chance that your business bank accounts are connected to your personal assets. If those bank accounts—and the payroll responsibility that comes with them—can only be handled from within your personal account, then your attorney would benefit from knowing that sort of information to make sure your employees get paid.

    Learn more about who can override a power of attorney →

    Should The Power Of Attorney And Executor Be The Same Person?

    The two roles can be done by the same person. Generally, the qualities that are important for each role are very similar. It’s a good idea to choose someone who is very responsible, organized and detail-oriented, who you have a great deal of trust in. 

    It’s not uncommon to have one person take on both responsibilities, especially if you’ve chosen a family member. And while the jobs don’t overlap since one only starts after your death, asking someone to do both may be asking a lot. These are both big jobs with lots of responsibilities.

    Can A Power Of Attorney Override A Will?

    No. Canada has several legal restrictions that help prevent an attorney from taking advantage of their situation. There are also rules that make it so they can be held liable if they fail to manage affairs as outlined in your power of attorney document. Your attorney can’t make a will for you, change your existing will, change a beneficiary on a life insurance plan, or give a new attorney to someone else on your behalf.

    Can A Power Of Attorney Act On Behalf Of An Executor?

    No. There’s a clear line between life and death and that line distinguishes between the attorney and an executor’s jobs. Once you pass away, the attorney’s job is over. Your assets and estate are still yours, which means that once it’s time for an executor to step in, the attorney is no longer involved in your affairs.

    If your attorney and your executor are the same person, then it’s just a matter of one job ending and another beginning.

    Make Decisions Now For When You Can’t Make Any Decisions At All

    Unless you’ve got a working crystal ball, it’s not likely that you’ll be able to predict when you’ll pass away or fall into a coma. That’s what wills and powers of attorney are for— to help you make sure everything’s taken care of when the unforeseeable happens. 

    At the end of the day, you might not know that you’re going to get in a freak accident involving a moose, but that doesn’t mean you can’t be prepared for it.

    Start writing your will and power of attorney for free today. 

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