Relationship of Power of Attorney to Other Legal Devices

What is the difference between an attorney-in-fact and an executor?

            An Executor, sometimes referred to as a “personal representative,” is the person who takes care of another’s estate after that person dies. An attorney-in-fact can only take care of a person’s affairs while they are alive; therefore, the Power of Attorney ends when the principal dies. An executor is named in a person’s will and can only be appointed after a court proceeding called “probate.”

What is the difference between a Living Trust and a Power of Attorney?

            A Power of Attorney empowers an attorney-in-fact to do certain specified things for the principal during the principal’s lifetime. A Living Trust also allows a person, called a “trustee,” to do certain things for the maker of the trust during that person’s lifetime but these powers also extend beyond death. A Living Trust is like a Power of Attorney in that it allows a person to manage another’s assets. Like an attorney-in-fact, the Trustee can do banking transactions, investments, and many other tasks related to the management of the person’s assets.

            Unlike a Power of Attorney, however, the Trustee has control only over those assets that are titled in the name of the Living Trust. For example, if a bank account is titled in the name of the person alone, the Trustee has no power over that asset. In order to give the Trustee control over an asset, the maker of the Trust must arrange for the account or property to be owned by the Trust. Also unlike an attorney-in-fact, upon death the Trustee can then distribute the person’s assets in accordance with the person’s written instructions. There are some transactions that a Power of Attorney is better suited for than a Trust and vise versa.

Might there be a conflict between my actions as attorney-in-fact and the Trustee’s actions?

            If the principal of your Power of Attorney also has a Trust and if your powers overlap, your attorney may have to prepare a document notifying the Trustee of the Power of Attorney. For example, you, as attorney-in-fact, may be authorized to sell the principal’s home but the principal’s home is owned by the Trust. The document that your lawyer can prepare is called a “release” because it allows the Trustee to release you the power, as in this example, to sell the home. Whether a release needs to be delivered to the Trustee is a question for your lawyer to decide. If your principal had a Trust, you should raise the issue with your attorney.

As attorney-in-fact, what can I do to assist the principal with his or her estate plan?

            Estate planning involves making sure that a person’s possessions and property will pass to whom they want after their death and may also involve saving money on taxes. As attorney-in-fact, you cannot make a will for the principal nor can you make a codicil to change an existing will. Likewise, you cannot revoke a principal’s wills or codicils. If the Power of Attorney specifically says so, however, you, as attorney-in-fact, can transfer assets to a Trust that the principal had already created and may even be able to execute a new trust for the principal.

            As discussed earlier, a Trust only has powers over those assets that are titled in the name of the Trust. If the Power of Attorney specifically says so, you may change the names on accounts or property to add things to the Trust. If the Power of Attorney specifically says you can, you may also do certain transactions that will, ultimately, benefit persons after the principal’s death.

            For example, if specifically mentioned in the Power of Attorney, you could do a document called a “Life Estate Deed” that allows the principal to own a piece of real estate for the rest of his or her life but that, immediately upon the principal’s death, will pass title to the person or persons named in the deed.

To learn more about estate planning and elder law, visit Estate and Elder Planning by David Wingate at www.davidwingate.com. For an Initial Consultation, call (301) 663-9230. We can assist you with powers of attorneys, living wills, wills, trusts, Medicaid planning, and asset protection. With office locations in Frederick, Washington, and Montgomery Counties, Maryland, we are here to provide you with peace of mind.

Disclaimer:

The information provided in this blog post is for general informational purposes only and should not be construed as legal advice. While we strive to provide accurate and up-to-date information, laws and regulations regarding dementia, estate planning, and elder law can vary by jurisdiction and may change over time.

The content of this blog post is not intended to create an attorney-client relationship between the reader and Estate and Elder Planning by David Wingate or any of its attorneys. It is always recommended to seek professional legal advice tailored to your specific situation from a qualified attorney.

The applicability of legal principles can vary based on individual circumstances, and the information provided in this blog post may not necessarily address all possible legal issues or concerns. Therefore, it is advisable to consult with an experienced attorney before making any decisions or taking any actions based on the information provided in this blog post.

Estate and Elder Planning by David Wingate assumes no responsibility for any errors or omissions in the content of this blog post or for the accuracy, completeness, or adequacy of the information contained herein. Any reliance on the information provided in this blog post is at the reader’s own risk.

The inclusion of any links or references to external websites or resources does not imply endorsement or recommendation by Estate and Elder Planning by David Wingate. We cannot guarantee the accuracy or accessibility of the information on linked websites, and we are not responsible for any content or services provided on these sites.

We encourage readers to consult with an attorney regarding their specific legal concerns and to obtain professional advice tailored to their individual circumstances. Each person’s situation is unique, and the information provided in this blog post may not be applicable to everyone.

By reading this blog post, you acknowledge and agree that Estate and Elder Planning by David Wingate, its attorneys, and agents are not responsible or liable for any damages or losses arising from your reliance on the information provided herein.

Always consult with a qualified attorney for advice regarding your individual legal situation.