Difference Between Wills and Powers of Attorney
Wills and Powers of Attorney (POAs) are often referred to in the same sentence and linked together when working through the estate planning process, but it is important to understand that they are not the same thing. One is utilized to help communicate one's intentions in the case of incapacitation, where as the other does not take precedent until after death.
Wills are used after death to outline your final wishes as well as designate an executor who will see that your estate is settled accordingly. They should take into consideration any and all assets that you have in your possession, including property, investments, life insurance policies, bank accounts, businesses, and/or special vehicles. Some business owners choose to also have separate Wills associated with their corporations and their personal belongings. Read more about splitting up corporate and personal assets.
Powers of Attorney (POAs) are often considered “living Wills” and are used to empower someone else to act for you while you are still alive, but unable to make decisions for yourself. It is important that whoever you select as your Power of Attorney is aware of their responsibilities and feels comfortable making decisions on your behalf. It is also recommended that they be someone familiar with your affairs, understands your intentions, and will keep your best interests in mind. There are usually two different types of Powers of Attorney that people identify; one for personal care and one for financial matters. Read more about the difference between the two.