Some people who start estate planning in the Colorado Springs or Centennial area in Colorado ask if they need to choose between a will and a power of attorney. While this question is understandable, it reflects a misunderstanding of what these two key estate planning tools do. To help clarify why you won’t have to choose between a will and a power of attorney, and why your plan will probably include both tools, let’s take a look at some important issues.
Will and a Power of Attorney: Representatives
A power of attorney is a document through which you can appoint one or more representatives who can make choices for you or who can represent your interests when dealing with third-parties. Most powers of attorney focus on one of two important estate planning areas: health care and financial decision-making abilities. When you create a power of attorney you appoint an agent, also called an attorney-in-fact, and grant that person or organization the right to make decisions for you.
A last will and testament, on the other hand, is quite different. Your will is a document through which you can make inheritance choices, name an executor of your estate, appoint a guardian for your children, and other choices. The choices you make through your will take effect after you die, and the people or representatives you appoint to certain positions through your will have no authority until after you die.
Will and a Power of Attorney: Effectiveness
A power of attorney allows you to appoint a representative who can act for you while you are still alive. Once you die, the decision-making authority your agent has immediately terminates. (Technically, the power terminates as soon as your agent learns of your death, or when the agent learns that you have become incapacitated and the agent does not have durable power of attorney.) Your agent can only make decisions you have the ability to make, so once you die and lose your ability to make any decisions, your agent loses that ability as well.
A will, on the other hand, allows you to make choices that only apply after you die. For example, if you choose an executor of your estate in your will, the person or organization you choose has no legal authority to manage your property until you’ve died. Further, as long as you remain mentally capable, you can change the terms your will whenever you like as long as you do so in accordance with state law. The people you choose through your will have no authority to stop you from changing the document.
Upcoming Estate Planning Workshops
For more information about Wills and Power of Attorney, be sure to attend one of our workshops in September. Our workshops are presented by our own knowledgeable attorneys. After the workshop we offer a complementary consultation with one of our attorneys that we can schedule at a time that works best for you. Click here to register today!