Why Your Living Trust and Durable Power of Attorney Need to Work Together

When setting up your estate plan, you might be wondering about the roles of a Living Trust and a Durable Power of Attorney. These two tools serve different purposes but work best when used together. Here’s what you need to know.

Living Trusts and Incapacity

If you create a Living Trust, it’s designed to handle your assets if you become incapacitated. Your successor trustee steps in to manage the trust assets, ensuring everything runs smoothly. However, if you also have a Durable Power of Attorney, remember that this document doesn’t cover trust assets. Your attorney-in-fact manages your finances and property not held in the trust, but the Living Trust’s successor trustee remains in charge of trust assets.

Why Have Both?

It’s wise to appoint the same person as both your successor trustee and your attorney-in-fact. This alignment can simplify management and avoid confusion. Yet, even if your assets are mostly in the trust, you’ll likely continue to receive income such as Social Security or pensions. A Durable Power of Attorney becomes crucial here, as it lets your chosen person manage this income flow, keeping your finances in order during any period of incapacity.

Handling Daily Financial Matters

A Durable Power of Attorney ensures that your daily financial needs are met. This includes maintaining bank accounts, paying bills, and managing any financial transactions. Having this document in place helps prevent disruptions and ensures that someone you trust handles your financial affairs efficiently.

Your Estate Plan, Simplified

Balancing a Living Trust and a Durable Power of Attorney creates a strong foundation for your estate plan. Each serves a specific purpose and together, they cover all aspects of managing your assets and finances.

Get Professional Guidance

At The Mendez Law Firm, we specialize in Estate Planning and can guide you through creating a comprehensive Family Estate Plan. Call us at (407) 380-7724 or Email Us TODAY at mail@themendezlawfirm.com. We’ll schedule your FREE, No Obligation, No Cost office conference or Virtual Zoom conference to discuss your Family Estate Plan and review other Probate avoidance and Asset Protection options that may benefit you and your family. If you are looking for a Florida estate planning attorney in the Greater Orlando Area, we are here to help with all your Estate Planning and Asset Protection needs.