By: Cristin Gerczak. Esq.
September 28, 2021
Protecting your family and assets means understanding estate planning documents and the designated fiduciaries that are a part of your plan. Knowing you’re in control supports your peace of mind.
One common misconception in this area: many people think that “power of attorney” and “personal representative” mean the same thing. However, they serve different purposes.
The primary difference is that a power of attorney attends to a person’s financial needs while they are incapacitated or unable to take care of their responsibilities — but they are still alive. In contrast, the personal representative administers someone’s estate after the person has passed away.
It’s important to know that a power of attorney terminates when the person passes away. It’s at this point that the personal representative would take over to secure and file the last will and testament. They would also gather the assets for administration and distribution.
Said differently, your agent under power of attorney makes decisions during life, which expires upon death; whereas your personal representative only becomes relevant after you’ve passed away.
Each role does entail similar responsibilities, but timing makes the difference as to which agent takes responsibility in the moment.
The top four similar responsibilities are:
- Paying bills
- Filing and paying taxes
- Handling financial affairs
- Maintaining and managing assets
Typically, people nominate the same person to act as a power of attorney and a personal representative. It’s important for this agent to be aware of the actions they’re taking under a particular moniker. This will help avoid the possibility of claims of acting inappropriately under an expired document.
Who Should You Appoint For These Roles in Your Estate Plan?
First and foremost, it should be someone you trust. Being responsible and organized are also key traits for this type of role. Many people appoint a family member or friend. However, if this is not a suitable choice for you, then you may appoint an accountant, attorney, or another professional advisor.
An experienced estate planning attorney can help you understand the different roles that make up your estate plan. They can help you build a plan that achieves your estate planning goals, leaving you feeling accomplished and confident. Call us to get started today.
Cristin Gerczak, Esq.
Strategic Planning With Purpose®
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