A power of attorney is an essential estate planning document. It lets you appoint an agent to make a range of decisions for you in the event you become disabled (or in case you’re otherwise not available to be there, in person, for a legal or financial transaction).This helps to keep you out of living probate if you ever suffer a disabling injury or illness – instead of needing a court-appointed guardian, your power of attorney gives your agent the ability to act on your behalf. However, while a power of attorney can give your agent a wide range of authority when it comes to your financial affairs, there’s one thing that’s off limits to your agent: the assets in your trust.
When you establish a trust, you designate a trustee to manage all of the property you fund into the trust. Once property is transferred to your trust, it’s within the control of your trustee, and it is not governed by the terms of your power of attorney.
Does this mean that if you have a trust, you shouldn’t have a power of attorney? Not at all – a power of attorney is an essential document whether you have a will or a trust. When you have a trust, your power of attorney can act as a catch-all, making sure there’s someone in charge of bank accounts and assets that are not included in your trust.
It is, however, important that you know which of your property is controlled by your trust, and which falls under your power of attorney. This way, you can make sure you’re prepared for the possibility of disability – without any unsettling surprises for you and your loved ones.
Your estate planning attorney can help you make sure your entire estate plan is coordinated so that your goals are achieved and your family is protected, no matter what the future holds.