Often times we are asked what the difference is between a Trustee of a Trust and a Financial Power of Attorney. Knowing the difference is important because both a Trustee and a Financial Power of Attorney can be appointed immediately upon a finding of disability, depending on how your trust document and Power of Attorney document are structured, and therefore it is important to know what your Trustee is allowed to do for you versus what your Attorney-in-Fact is permitted to do.
A Trustee is a person or entity appointed to manage a trust on behalf of its beneficiaries. The Trustee has legal control over the assets held in the trust and is responsible for making decisions about how to manage, invest, and distribute those assets according to the terms of the trust. The Trustee’s duties are typically spelled out in the trust document and may include managing real estate, investing assets, paying bills, filing taxes, and distributing assets to beneficiaries.
A Financial Power of Attorney, on the other hand, is a legal document that gives another person the authority to act on your behalf in financial matters. This person, known as the agent or attorney-in-fact, can make decisions about your finances, such as paying bills, managing investments, and making other financial transactions, if you are unable to do so yourself due to illness or incapacity.
The key difference between a Trustee and a Financial Power of Attorney is the scope of their authority. A Trustee has legal control over the assets held in the trust and is responsible for managing those assets in accordance with the terms of the trust. A Financial Power of Attorney, on the other hand, only has the authority to manage the financial affairs of the person who granted the power of attorney, and only if that person is unable to do so themselves. Additionally, a Trustee’s authority generally lasts as long as the trust is in effect, while a Financial Power of Attorney typically ends upon the death of the person who granted the power of attorney.
If you have any questions about these key differences, contact us today at 703-558-9311 to schedule your free consultation with us or click here to fill out our contact form and we will contact you. We serve families living in Virginia, the District of Columbia, and Maryland.