The positions of power of attorney and executor are distinct legal roles. An executor administers a person’s will after their death. A power of attorney may be granted authority to make decisions on behalf of another person in the event they are incapacitated and unable to act during their lifetime.
Both are potentially powerful positions. As with any position of power, both are susceptible to abuse. When an agent with power of attorney is not acting in the principal’s best interests in handling their financial affairs or an executor’s actions will adversely impact those who are beneficiaries of the will, legal action may be necessary.
The attorneys at Albertson & Davidson, LLP help individuals and families in California work through disputes and, when necessary, go to court to challenge powers of attorney and litigate breaches of fiduciary responsibility by the executor of a decedent’s will and estate. Our attorneys focus on cases that involve complex inheritance matters, and issues such as undue influence and financial abuse of the elderly.
If you have concerns about the actions of an executor or power of attorney and their effect on your inheritance, contact Albertson & Davidson for prompt assistance. We help clients throughout the state of California from offices in Los Angeles, Carlsbad, San Francisco, Orange County, and Silicon Valley. Contact us today at (800) 601-0170 or online for a free and confidential consultation.
What Is a Power of Attorney?
The term power of attorney refers to a legal authorization that gives a designated person, known as the agent, the power to act for someone else. Powers of attorney are typically established to address financial and/or healthcare decisions.
The agent may be granted authority to make decisions:
- If the principal becomes injured or ill and incapable of acting on his or her own.
- For specific times when the principal will be unavailable such as during military deployments or medical convalescence.
Depending on the principal’s needs and wishes, a power of attorney may have general or limited authority.
A general power of attorney authorizes acting on behalf of the principal in all matters, as allowed by California law. A limited power of attorney allows the agent to act in specific matters such as healthcare decisions. The power of attorney legal document explicitly states the agent’s duties and responsibilities.
Types of Powers of Attorney
Powers of attorney are also described as:
- Durable. A durable power of attorney is meant to ensure the agent has control of legal matters, property, financial decisions, or healthcare decisions as spelled out in the agreement, including that it takes effect upon the principal’s incapacity. In estate planning, which should include plans for potential incapacity, all powers of attorney are established as durable.
- Non-durable. A non-durable power of attorney is granted for a set period of time and usually for a particular transaction. Once the transaction is completed, or should the principal become incapacitated during this time, the non-durable power of attorney is automatically revoked.
- In California, a power of attorney becomes a conditional or springing power of attorney by including the phrase: “This power of attorney shall become effective upon the incapacity of the principal.”
Regardless of the type of POA, the agent’s legal authority ends upon the principal’s death.
In California, POAs are established with specific forms:
- Uniform Statutory Form Power of Attorney for financial and general or limited POAs.
- Advance Health Care Directive for medical POAs.
To create a valid power of attorney in California:
- The principal must be at least 18 years old.
- The principal must have the mental capacity to grasp what a POA is and says and the implications of establishing it.
- The agent must also be at least 18 years old and be mentally capable.
- The document must be signed in front of a notary public or by two competent witnesses.
- A medical POA signed in a nursing home must be witnessed by a patient advocate or ombudsman in addition to the two competent witnesses and the notary public.
Understanding the Role of an Executor
The executor settles the accounts of the decedent’s estate and oversees the distribution of assets as directed by the decedent’s will or as state law directs if there is no will. If the decedent left a last will and testament, the executor is to carry out the decedent’s final wishes as stated in the will.
If any person or entity makes a claim against the estate, the executor is responsible for settling it in the best interests of the estate, including by mounting a legal defense, if appropriate. If there are debts owed to the estate, the executor is required to try to collect them, including by filing a lawsuit, if necessary.
Other Duties of an Executor
An executor is also responsible for:
- Identifying all assets of the estate and ensuring their security and upkeep until they are distributed.
- Establishing bank accounts as needed to ensure the cash flow required to administer and close the estate.
- Paying the estate’s bills, including taxes.
- Closing accounts by notifying banks, brokers, and governmental agencies, and terminating leases, contracts, and subscriptions.
- Locating heirs and/or filing requisite public notices of the decedent’s death and a call for claims.
- Keeping beneficiaries advised of progress made toward distributing and closing the estate, including responding to inquiries.
- Hiring at estate expense any professionals (appraisers, accountants, lawyers, property managers) required to assist with the duties of the executor.
- Supervising distribution of the estate’s assets and filing the necessary petitions with the court.
- Filing accounting and status reports as required by the court.
The executor has the authority to sell property or assets that are not designated for disbursal to a specific beneficiary if sales are necessary to pay bills or to meet the requirements of the will, such as to divide remaining assets evenly.
California requires an executor to be at least 18 years old and of sound mind. However, an executor should have some financial and organizational skills as well as the time and temperament for a job likely to last for a year or longer.
Comparing Power of Attorney and Executor
An individual granted a power of attorney has the authority and responsibility for making decisions on behalf of another person and managing the other person’s affairs when the principal is alive but incapacitated. A power of attorney uses their own judgment when managing the principal’s legal, financial, or healthcare decisions.
An individual named as executor manages the estate of a person who has died. The executor must act according to the principal’s will when managing and distributing assets of the decedent’s estate.
Can One Person Have Power of Attorney and Be Executor?
Can the executor of a will also be a beneficiary of the will? Yes, one person can fill both roles and often does.
When choosing someone to carry out decisions with power of attorney for you or to act as executor of your will and estate after you die, you will naturally turn to someone close to you whom you trust. People often choose one of their grown children or another trusted relative or friend for the roles.
A POA is essentially a private contract, but a probate judge must formally appoint the executor of a will. If the judge finds the person named incapable of performing the job correctly, he or she may remove them and appoint someone else.
There’s no reason why the same person cannot hold power of attorney over your affairs when you have become unable to handle them and serve as executor of your final will and testament once you are gone. However, these are responsible and time-consuming undertakings. You should be sure the person you appoint is capable and willing.
It’s possible for someone to decline either role when the time comes, or for them to have grown older and unable to fulfill the duties themselves. This is a reason to be sure of your selection and to keep in touch with them as the years go by.
An alternative is to have your estate planning attorney assume these roles. They will be guided by professional training and ethics. If they are not available when the time comes, they or their firm will have made arrangements to pass the duty on to another firm.
Talk to a California Inheritance Litigation Attorney Today
The attorneys at Albertson & Davidson, LLP are trial lawyers who focus on estate and trust litigation to protect our clients’ inheritances. If you believe an agent with power of attorney is not acting in the best interests of someone who is incapacitated, or you are the beneficiary of an estate in probate and suspect the executor of the will is acting against your interests, we can help. We are aggressive litigators who have the skills necessary to settle estate and inheritance disputes through negotiations or at trial, if necessary, to achieve a client’s desired results.
We are financial elder abuse attorneys who file claims against abusive POAs and others who are attempting to take an elder’s or dependent adult’s assets through undue influence, coercion, or outright theft.
Contact us online or at (877) 637-7234 for a free initial consultation. Albertson & Davidson serves all of California from offices in Los Angeles, El Segundo, San Francisco, San Diego, Carlsbad, Redwood City, and Irvine. We stand. We fight. We win.
