While a POA agent can make decisions on the principal's finances and health care, their role essentially dies with the death of the principal. A trustee, however, is responsible for the assets held within a trust and their administration following the trustor's death or guidelines of the trust document.
If your parents have a living trust and they become incapacitated, you may think that you can simply use a Durable POA for finances to pay their bills, etc. But you can't. Why? Because the trustee of the trust (i.e., your parents) technically owns all the assets in the trust.
This is a fundamental concept of trust law: the separation of legal and equitable title. In other words, while the trustee has the legal authority to manage and control the assets, they do so not for their own benefit, but for the beneficiaries.
In general, the Principal (whomever created the Power of Attorney, or POA) can always override the legal document.
If a family member is residing in one of the principal's properties without paying rent, or if the family member is in violation of the terms of their lease, or if their lease has expired but they are refusing to move out, then the agent with power of attorney will need to file an eviction action with the court with ...
During the term of the trust, the trustee has the power to perform, without court authorization, every act which a prudent person dealing with the property of another would perform for the purposes of the trust.
A trustee can end up having to pay taxes out of their own personal funds if they fail to take action on behalf of the estate in a timely way. Of course, they can also face criminal liability for such crimes as taking money out of a trust to pay for their own kids' college tuition. Yup, that's stealing.
In essence, while both roles are powerful within their domains, trustees often have more enduring and autonomous control over the assets they manage.
It is not unusual for the successor trustee of a trust to also be a beneficiary of the same trust. This is because settlors often name trusted family members or friends to both manage their trust and inherit from it.
Power of attorney abuse must be proven before action can be taken. Financial records showing that the Agent is taking advantage of the Principal are often the best proof. You can file a lawsuit against the Agent for power of attorney abuse.
Can a Trustee appoint a Power of Attorney? Generally speaking, a Trustee (who is not also the Grantor) cannot appoint a Power of Attorney to take over the Trustee's duties or responsibilities, unless this is something that is directly permitted by the Trust Deed or a court order.
So, now you know that the Trust Maker holds the most power before the Trust is established, but the Trustee holds the most power after the Trust is established.
The Durable Power of Attorney
A Durable POA remains effective even if you become incapacitated. This type of POA ensures your agent, whether for financial or healthcare , can continue to act on your behalf if you are unable to do so.
Serving as the trustee of a trust instills a person with significant power. They have access to all the trust assets, but with a catch: They can only use those assets to carry out the instructions of the trust.
THE DIFFERENCE:
The power of attorney is strictly limited to non-trust assets. For assets titled in a trust, the POA document will not authorize the agent to access those assets. Trust assets can only be accessed by the Trustee.
The answer is a resounding yes. The ability to seek removal and replacement of a trustee is one of your most important rights as a trust beneficiary. And it may be the only option you have for ensuring you receive your rightful inheritance from a deceased loved one's trust.
If the trustee is not paying beneficiaries accurately or on time, legal action can be taken against them.
Trustees are personally liable for all decisions they take in that capacity, and their liability is not automatically limited to the value of the trust fund. Typically, the trust deed will limit trustees' liability in some way and these clauses should be checked, as well as any existing trustee insurance.
Can a Nursing Home Override a Power Of Attorney? Generally, a nursing home cannot override the decisions made by an agent with power of attorney. The purpose of a POA is to give a trusted individual legal authority to act on the principal's behalf when they can no longer make decisions.
Co-Owner's Right to Access the Property
A fundamental rule of co-ownership in California is that: “One of the essential unities of a joint tenancy is that of possession. Each tenant owns an equal interest in all of the fee, and each has an equal right to possession of the whole. Possession by one is possession by all.
If the principal wants to see the visitor, the POA cannot interfere. If the principal lacks mental capacity, the POA (a/k/a the attorney-in-fact) may control most aspects of life. However, restricting access to friends and family is not normally done unless necessary to protect the principal.