When planning for the future, clients are often confused about the distinct roles of a Power of Attorney and a Last Will and Testament. Though both are critical components of a comprehensive estate plan, they serve very different purposes and operate at different times. Understanding how these documents work—and when they apply—can help ensure your wishes are carried out effectively.
Power of Attorney: Authority During Life
A Power of Attorney (POA) is a legal instrument by which an individual (the “principal”) grants another person (the “agent” or “attorney-in-fact”) authority to act on their behalf during their lifetime. The scope of authority can be broad or limited, depending on how the POA is drafted.
Key Features:
- Effective During Life Only: A POA becomes invalid upon the death of the principal.
- Types of POA:
- Durable Power of Attorney: Remains effective even if the principal becomes incapacitated.
- Springing Power of Attorney: Becomes effective only upon the principal’s incapacity, if such a condition is specified.
- Scope: May include authority to handle financial matters, real estate transactions, banking, tax filings, and more. A separate Health Care Power of Attorney is used to delegate authority over medical decisions.
A POA is a vital tool for incapacity planning. It ensures that someone you trust can manage your affairs if you become unable to do so.
Last Will and Testament: Disposition After Death
A Last Will and Testament is a testamentary document that becomes operative only upon the death of the testator (the person making the will). It directs how the testator’s assets are to be distributed, names guardians for minor children, and nominates an executor to administer the estate.
Key Features:
- Effective Only Upon Death: A will has no legal authority until the testator dies and the document is admitted to probate.
- Probate Requirement: Wills must generally be filed with the appropriate probate court to be given effect.
- Disposition of Assets: A will governs the distribution of probate assets only—i.e., assets titled solely in the decedent’s name without designated beneficiaries.
A will is essential for directing the orderly transfer of property at death and for minimizing disputes among heirs.
Summary of Key Differences
| Feature | Power of Attorney | Last Will and Testament |
| Effective When? | During the principal’s lifetime | Only after the testator’s death |
| Terminates When? | At the principal’s death | Upon completion of estate administration |
| Purpose | Delegates decision-making authority | Disposes of property after death |
| Probate Involvement | No | Yes |
| Medical Decisions? | Yes (with a Health Care POA) | No |
Why You Need Both
Having both documents in place is not redundant—it’s prudent. A power of attorney protects you during your life if you become incapacitated. A will protects your legacy after your death. Without a valid POA, loved ones may be forced to seek a guardianship through the courts. Without a will, your estate will be distributed according to state intestacy laws, which may not align with your wishes.
Final Thoughts
Estate planning is about more than just distributing assets—it’s about protecting yourself, your loved ones, and your intentions. At A.H.Steinmetz, Ltd., we routinely advise clients on the creation of tailored estate plans that include both powers of attorney and wills. If you have questions or need assistance drafting these vital documents, contact us today to schedule a consultation.
