Last Will and Testament
A last will and testament (commonly known simply as a "will") is a legal document identifying those persons (beneficiaries) you wish to receive your property upon your death. In addition a will nominate a personal representative (executor) to be responsible for the proper administration of your estate and the disposition of your property to your intended beneficiaries. Shortly after your death, the person or entity you nominated as your personal representative opens a probate proceeding in court and asks the judge to appoint him or her as the personal representative of your estate. After being appointed, your personal representative manages your estate’s financial affairs and ensures that your property is distributed in accordance with your wishes. A will can also nominate a guardian in the event you are survived by minor children. Each state has intestacy laws (laws that govern the disposition of one's property if he or she dies without a will). Having a valid will is essential if you do not want your property to pass by the laws of intestacy.
Power of Attorney
A Power of Attorney (commonly referred to as a POA) is a legal mechanism to manage your important affairs in the event you become unable to do so, like if you are suffering from dementia or are medically incapacitated. There are several types of powers of attorney, such as a general power of attorney (someone can make all decisions and sign all documents on your behalf as if you made those decisions or signed those documents); a special or limited power of attorney (someone can make certain specified decisions and sign certain specified documents on your behalf); and a health care power of attorney (someone can make decisions related to your health care.)