In estate planning, two key legal roles exist with clearly defined responsibilities, a power of attorney and the executor of a Will.
The former is charged with looking after an individual’s welfare and wealth when they are alive but may no longer have the mental capacity to make decisions in their best interests. The latter, however, is responsible for ensuring that the wishes of a deceased individual are carried out to the letter.
What is power of attorney?
Attorneys are representatives that can be selected by a person to act in their stead should they lose the mental capacity to effectively make decisions for themselves. The person, legally referred to as “the donor”, registers one or more attorneys to act for them in a legal document known as a Lasting Power of Attorney, or LPA for short.
The two most common types of LPA cover “Health and Welfare” and “Property and Finance”. The first lets the attorney make decisions regarding living arrangements and medical care, while the second gives a person access to personal accounts to make payments while managing pensions, benefits and other sources of revenue.
While an executor only acts when a person dies, a power of attorney acts when a person is still alive but is mentally incapacitated. It’s worth noting that a property and finance LPA can be used when a donor still has capacity and can be valuable when they are unwell and can’t manage their financial affairs. However, an LPA covering health and welfare only activates after the donor is deemed to lack the mental capacity to make their own decisions.
Attorneys must be appointed while a person can still make decisions for themselves. If an individual loses mental capacity without an LPA, their loved ones don’t automatically have the right to manage their affairs. Instead, they must submit an application to the Court of Protection requesting that they become their deputy.
What is an executor of a will?
The executor of a will can be a single individual or more. They are responsible for the distribution of a deceased person’s estate in accordance with their express instructions detailed in their personal Will. Typically, an executor is named by the deceased during the process of drawing up their Will.
If an individual dies without a Will and has not nominated an executor, the person responsible for distributing the deceased’s estate is referred to as the Administrator. The rules of intestacy determine who the Administrator of the estate shall be.
Regardless, there are specific aspects of the legal process that an administrator or executor cannot carry out, like withdrawing certain funds or selling the deceased’s property, until they have been given the authority to do so. This right is granted by the Probate Registry and differs for executors and administrators. For executors, the documentation is called the “Grant of Probate”, while for administrators, it is known as the “Grant of Letters of Administration”.
The responsibilities of an executor and the Probate process are often complex. As a result, individuals appointed are advised to consult an experienced Wills and Probate solicitor for support and guidance.
Unlike the power of attorney, the executor only acts after the person who nominates them in their Will dies. The probate process has five key stages, starting with registering the death within five days and establishing personal instructions of the deceased.
Next, the estate must be valued so that accurate information is available to complete the inheritance (IHT) tax return. The executor then submits the return and after the IHT is paid, a confirmation receipt is issued by HMRC that lets them apply for a grant of Probate from the Probate Registry. Once the grant is issued, the executor can access the assets of the deceased and follow the instructions left in their Will. The final stage is administering the estate which involves collecting assets, paying debts, distributing bequests, completing further tax returns and paying tax on assets sold or disposed of and recording all actions taken.
Do you have more questions about power attorneys and Will executors?
As experienced Wills and Probate solicitors in North Wales, you can count on our capable team at Bennett Smith Solicitors. Whether you wish to nominate a power of attorney or appoint and executor for a personal Will, reach out to us today for a smooth and friendly service you can trust.
