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What is a Power of Attorney

In this line of work, we often use examples to illustrate the differences in terminology. Wills, estates, living wills, powers of attorney and more are terms we use in our office all day long but these are confusing to our clients. For the purposes of this article (and many more), we will use scenarios to explain how they are different and hopefully dispel the confusion.

Power of Attorney

A power of attorney (POA) is only valid when a person is alive. Basically it says that you are granting another living person the permission to act on your behalf on a given set of circumstances. It can be limited or full. It can also be rescinded at any time, for the most part. More on that later. That’s where it can get complicated.

Example: Roger and Pete have been friends for over 50 years. They Pete has suffered serious hearing loss from all the years in a rock band. He wants to make sure his stake in the band is solid as he ages so he makes Roger his POA for all financial matters. He can trust Roger. They are both very wealthy and Roger has no reason to want Pete’s money. Roger has his own. However, Pete does not want Roger making health or medical decisions for him. As such, Pete makes his wife POA for all of his health matters. What does this mean?

It means that in the event that Pete can no longer make these decisions for himself, Roger steps in and makes the financial decisions. When Pete can no longer make his own health or medical decisions, his wife steps in. Now, this is the critical part. If Pete did not do his POAs properly (with the assistance of an experienced estate attorney), he may have given over his rights to everything. It cannot be stressed enough that a POA gives the rights to act on a person’s behalf just as if you are that person. It is critical that this be considered and planned out. It should be done with a trustworthy person and become effective only in certain events.

Pete will want to work with his lawyer to ask that Roger only use the POA if a certain event happens to Pete. For example, if Pete falls off stage during a concert, goes to surgery and Roger needs to make Pete’s financial decisions while he’s in surgery and recovering. Roger would NOT be making the medical decisions. Pete’s wife would.

However, in the case of Roger & Pete’s band, it is very likely that due to their wealth, they would each have a financial advisor to act on their behalf on all business financial transactions. People who are wealthy, such as Pete, often do just that.

The point is that when you create a POA, you are giving up your rights so you want to be careful and know what you give up, when you give it up and know the person. We recommend that you speak to an experienced lawyer before you sign a POA.

Wills & Living Wills

Now that we have discussed the power of attorney, let’s discuss equally confusing terms: the living will & Wills.

A Living Will takes effect when there is no hope for survival. For example, an accident happens and the person is not going to make a recovery. Rather than allow the person to remain in a hospital bed with no quality of life, a living will provides direction on what the person would like to happen. There are many aspects to a living will.


A will is the legal document after a person is deceased. In a Will, there is a designated person usually referred to as an administrator, executor, or personal representative. He, or she, is named during the creation of the Will. The POA that was in existence during the person’s lifetime is now gone.

Ex: Tom passed away suddenly. He left behind his wife, daughter and a band. He had a power of attorney for his financials which his band manager handled and a medical POA which is wife handled. His will named his daughter as the administrator of his estate.

The manager of the band comes forth and asks about handling his estate because he held his POA. He is informed by the estate attorney that the POA is no longer valid. A power of attorney only exists while the person is alive. He informs the manager that there are other people named as personal representatives to the estate and that he will be notified at the appropriate time.

Because of his wealth, this would be a very complex estate so we will not go into details here on that type of situation other that to explain that when a person creates their Will, which is typically a part of their Estate plan, they will name at least one executor. They may name co-executors such as two children or a spouse and a child. The executor (administrator) is the contact person.

Naming an Executor

Naming an Executor is probably the most important part of creating your Will. We highly recommend you discuss this with an experienced estate lawyer rather than trying to do it yourself.


If you are in need of any of these estate plans, contact Jason. It’s always better to have a well thought out plan before you (or your loved ones) need it.

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