What’s the difference between a Will and a Power of Attorney is yet another question that I often get from people who contact me. People often confuse what each document can and cannot do for them. I’ve even had a few people tell me that they thought they were the same thing. So I will now talk about some of the major differences.
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As I mentioned in a previous blog post when describing the difference between a Will and a Living Will, a Will is a document that gives instructions to what happens to your assets upon your death. It can also include things like naming a guardian for your children (if you have any), testamentary trusts, and requesting what should be done with your remains. However, none of these things can take effect until you die.
As you may know, the wording in a Will appoints someone to be the executor of the estate. This person is in charge of paying bills off for the estate and distributing the remaining assets per the terms of the Will. However, the executor does not have any authority to do anything at all until after you have died and the Will has been entered into probate. In other words, the executor can’t help take care of any of your financial issues while you are still alive.
On the other hand, a Power of Attorney, sometimes called a Durable Power of Attorney, gives someone you trust, your “agent”, the authority to make financial decisions for you while you are still living. This authority can be given to the appointed agent immediately. Or it can be granted only when you are incapacitated due to an accident or illness. However, as soon as you die, the Power of Attorney is no longer valid which means your appointed agent can no longer legally take care of your bills or assets. This is when the executor named in your Will, assuming you have one, will take of your remaining financial affairs.
As you can see, it’s really important to have both of these documents. One helps you take care of things while you are alive and the other takes care of things after you have died.
