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Trustees vs. POA Agents

Cooper Estate Planning July 5, 2024

  • BOTH serve in a fiduciary capacity.

  • A trustee’s fiduciary responsibility is to the beneficiaries of the trust, while a POA
    agent has a fiduciary responsibility to the person who named them as agent.

  • The same person may be both the power of attorney agent and a trustee, BUT
    they would act with respect to different property, accounts, etc...

Trustees

  • A trustee has signed the trust document and has agreed to take on an obligation to act on behalf of the beneficiaries.

  • The trustee can only act with respect to the property in the trust, not personal
    assets and/or decisions.

  • A trust provides more defensive protection for assets compared to a power of
    attorney document.

POA Agents

  • In contrast with a Trustee, Power of attorney agents do NOT have an affirmative obligation to act. However, if and when they choose to act, they must do so on behalf of the person who named them (the "Principal").

  • A power of attorney agent may not even be aware that they have been named as an
    agent.

  • In rare situations, the power of attorney agent may have been granted authority to act with respect to the trust.

  • The power of attorney document allows someone to act on behalf of the person
    in legal or financial matters.



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