Who Has More Authority; Power of Attorney, Executor or Trustee?

Many people are confused about the different legal titles, especially what power and authority a person has acting as a Power of Attorney for another person versus the power and authority of an Executor under a Will or a Trustee under a Trust. Actually, they have a lot of similarities. All of these documents give the authority and power to one person to act financially for the benefit of another person. The only main difference is that an Executor under a Will or a Trustee under a Trust are acting for a deceased person, whereas a Power of Attorney is one person acting for another live person under a document called a Durable Power of Attorney.

Many people come into my office after their father or mother has passed away and say that they are there to settle the Estate or Trust of a loved one and that they are the rightful person to do so because they held a valid Durable Power of Attorney for that person while they were alive. They are surprised to learn that their power granted under the Power of Attorney dies with the person who granted that power. It is the person who is named in the decedent’s Will as the Executor (or in Arizona and most states we call that person a “Personal Representative”) who has the authority to act for the Estate.

The question becomes what is the “triggering event” that activates a Power of Attorney for a living person or an Executor of a deceased person? In most cases, the power under the Power of Attorney is activated (or “springs into existence”) when the living person is deemed incompetent to act for themselves. And usually, the triggering event for this “springing Power of Attorney” is a letter from two doctors that have seen that person and can certify that the person no longer has the capacity either for mental reasons or other reasons to be able to financially manage their affairs.

The triggering event for a Will comes from the Probate Court certifying that the Will of the deceased person has been entered into Probate and is the valid legal wishes of the decedent. The Probate Court issues a document called “Letters Testamentary” and this document grants power and authority for the Executor to act for the deceased person.

The triggering event for a Successor Trustee under the Trust is merely a Death Certificate and the power and authority that is granted under the Trust.

What “power” or authority does an Executor have to act for a deceased person? That answer is simple, basically they have the same power to act for a deceased person as a Power of Attorney has to act for an incapacitated person. That is, the power and authority to take care of the financial affairs of the deceased person. To learn more about the things that the Executor does for the assets of the deceased person read the article on this Jet Probate website entitled “Probate is a Process: But Benefits are Immediate”

What power does a Trustee over a Trust have that is different than the power and authority of an Executor of an Estate? This is also a simple answer. Any assets that were titled in the name of the Trust prior to the death of the decedent is controlled by the authority of the Trustee named in that document. All assets that were not titled in the name of the Trust at the time of the decedent’s death are controlled by the Executor under the Will.

The power and authority of the Trustee under a Trust comes from the Trust document and no Probate is needed for the Trustee to deal with the assets owned by the Trust. But, as discussed above, assets that are not in the Trust are controlled by the Will and the power and authority of the Executor is granted by the Probate Court. So, as discussed throughout this website, Probate is only needed if there are assets of a deceased person that were not held inside of a Trust or did not have a Right of Survivorship feature or some other contractual feature to avoid Probate like a beneficiary designation under a Life Insurance Policy or an Annuity or IRA.

The power of the Executor is short lived and only lasts during the Probate process, which can be anywhere from a 6-month period to a two-year period. And usually, when Probate is over the assets are either distributed outright to the beneficiaries or are distributed to a Trust to be held by the Trustee for the benefit of the beneficiaries. This type of Will is usually referred to as a “Pour-over Will” in that all of the assets of the Probate Estate end up or “pour-over” to the Trust. So, the power and authority of a Trustee is ultimately a longer-lasting power and will last for the duration of the Trust, which may be up to the lifetimes of all beneficiaries of the Trust.

The Executor’s power is ultimately to get all of the assets distributed to the appropriate beneficiary or beneficiaries which may end up being a Trust. Generally, the power and authority of a Trustee and Executor are similar, but they just have power over certain “buckets of assets”. Many times, the deceased person will name the same person under the Will to serve as the Executor as is named in the Trust to serve as the Successor Trustee. And in fact, it could be the same person that was named in the Durable Power of Attorney that helped that deceased person during their lifetime.

In my 37 years of experience, I like to name different people for each role to have some checks and balances and accountability to all of the beneficiaries. For the Power of Attorney, I like to name a friend or family member that lives in close proximity to the person granting the power. That makes it easier for them to check in on the person and see what their needs and wants are. For the Will, I like to name the person that is best suited to deal with the more personal belongings of the decedent since these personal items of tangible personal property are generally not in the Trust. So, once again this could be a family member or friend, but usually a trusted family member. But, for the Trustee under the Trust, since it tends to be more long-lasting, I prefer to name someone that is completely independent of the family so as to eliminate any conflicts of interest or self-dealing. Take a look at our article written under our sister law firm of Dana Whiting Law entitled “Designating a Co-Trustee and a Successor Trustee”.