A will is a legal document which says who will inherit your property and possessions after your death. In the will, you name a person to administer your estate. This person, who is called the “executor”, collects the assets in the estate, pays the estate’s debts and distributes the remaining assets to the beneficiaries named in the will.
A living will (also called an “advance directive”) is a legal document in which you say which kinds of medical treatment you do or do not want in the event that you become terminally ill and are not able to express your wishes. You can also name a person to make medical decisions for you if you are not able to do it yourself. This person is called a “health care proxy”.
A power of attorney is a written legal document which authorizes a person (called an “agent”) to handle certain types of business transactions for the person who signs the power of attorney (who is called the “principal”). The power of attorney document says exactly which kinds of transactions the agent is allowed to perform. A power of attorney is no longer valid and cannot be used after the death of the principal. An agent under a power of attorney does not have the authority to administer the principal’s estate.
It is important to know that in order to execute a will, a living will or a power of attorney, a person must have the mental capacity to understand the terms of the document. If the person does not have this capacity and needs someone to handle their affairs or make decisions for them, they may need a guardian to be appointed.
