Power of Attorney vs Trustee
“When planning your estate, it’s essential to understand the key differences between a Power of Attorney and vs Trustee. While both can act on your behalf, their responsibilities, authority, and roles in estate planning differ significantly.
What Is a Power of Attorney?
A Power of Attorney grants someone—your agent or attorney-in-fact—the legal authority to make decisions on your behalf if you become incapacitated. This authority can cover financial matters, healthcare decisions, or both, depending on how the POA document is written.
The POA’s powers are generally flexible and can be broad or limited, depending on your instructions. A medical power of attorney, for example, specifically authorizes healthcare decisions.
What Is a Trustee?
A trustee is appointed to manage assets placed within a trust. Unlike a POA, a trustee’s responsibilities usually begin after the trust is established, often continuing after the grantor’s death. The trustee manages, invests, protects, and distributes trust assets according to the trust document’s terms.
Trustees have a fiduciary duty to act in the best interest of the beneficiaries and follow precise instructions laid out in the trust agreement.
Key Differences
| Aspect | Power of Attorney | Trustee |
|---|---|---|
| When Authority Begins | While the principal is alive and incapacitated | When the trust is created or after grantor’s death |
| Scope of Decisions | Broad or limited, can include financial and medical decisions | Focused on managing and distributing trust assets |
| Authority Duration | Ends at death or revocation | Continues until trust terms are fulfilled |
| Role Type | Agent or representative | Fiduciary trustee |
Why Both Matter in Estate Planning
Many people appoint both a POA and a trustee to cover different aspects of their affairs. Understanding these roles helps you make informed decisions about whom to appoint and how to structure your estate plan.
Ready to Take the Next Step in Your Estate Plan?
If you need help setting up your POA or trust, consulting an estate planning attorney is a smart move. Visit Hudack Law to learn more about our estate planning services. We proudly serve California, Utah, and Arizona. Call our toll-free number at (877) 314-4309 to schedule a consultation with one of our experienced attorneys.