The major differences between a power of attorney and a will are often not understood by my clients when they first contact me. Both are very important documents when it comes to estate planning. In many ways they are the most important documents of someone’s estate plan. But at the same time they cover very different areas for how your assets, i.e. estate, are handled.
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A power of attorney lets you name someone to act on your behalf when it comes to making financial decisions for you during your lifetime. “During your lifetime” is the key here, because when you die the authority of your power of attorney completely ends. The power of attorney is no longer legally valid. This specific point is what many people do not realize. They often think that if they have a power of attorney in place that the person they named as their agent will be able to take care of their financial affairs, assets, etc. after they die. This is incorrect.
A will lets you name someone to act as the executor of your estate when you die. “When you die” is the key here, because the executor does not have any authority to do anything until after you die. This of course is the complete opposite of the authority given to someone with a power of attorney. After you die, the executor will be able to enter your will into probate. And if you have a properly written will, the judge will give the executor what are called letters testamentary. These letters give the executor authority to pay off any debts that you might have and then distribute the assets left over using the directions you have put in your will.
Both of these documents play powerful roles in protecting your assets and making sure your assets are used and distributed in the ways that you want. If you don’t have both of these documents in place, then your affairs can get caught up in the court system causing wasted time and money for your estate and family. And in the worst of cases your assets could get distributed in ways that you would never have wanted.
