IF I HAVE A TRUST, WHY DO I ALSO NEED A POWER OF ATTORNEY? (video)

admin • June 26, 2024

Even if someone has established a revocable living trust as part of their estate plan, they may still require a power of attorney for a few key reasons.

First, a power of attorney is needed for managing non-trust assets that were never properly retitled and funded into the trust. Second, it is essential for handling non-trust financial matters and making decisions during any period of incapacity. A specific power of attorney may also be required for certain legal transactions and contexts.

Finally, having a durable power of attorney in place can help avoid costly and time-consuming court interventions through conservatorship. Therefore, while a living trust is crucial, a power of attorney is also a crucial supplemental document for managing non-trust assets and personal affairs during the creator’s lifetime, especially in case of incapacity.

Transcript:

” The simplest answer to that is because a trust will own most of the probatable assets that a person owns. The trust can’t own everything. It doesn’t own retirement plans. 401(k)s and IRAs have beneficiary forms, and so if someone is incapacitated and they need a person to take their, for example, required minimum distribution on their behalf, that is going to be something that only a power of attorney holder can do.

Similarly, if the person is injured and in the hospital and needs somebody to make a health insurance claim on their behalf, that health insurance policy isn’t owned by a trust. It’s owned by the person personally, and so they need somebody who has a power of attorney in order to make that claim on their behalf.

There are a lot of financial transactions that get undertaken outside the trust context, and so if a client is incapacitated, they’ll need what we call an attorney-in-fact who holds the power of attorney on their behalf to make those transactions for them.”

Need Power of Attorney? Contact Us Today

Rather than attempting a do-it-yourself power of attorney that could potentially create issues, clients receive Andrew Fesler’s trusted legal guidance and expertise. With attention to detail and nuanced customization, our team delivers tailored POAs that robustly protect clients while seamlessly aligning with their trust and broader estate objectives.

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