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.
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.
The probate court appoints the executor after filing the will. It is common for the executor and trustee to be the same person.
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.
Selecting the wrong trustee is easily the biggest blunder parents can make when setting up a trust fund. As estate planning attorneys, we've seen first-hand how this critical error undermines so many parents' good intentions.
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.
The answer to who holds more power depends largely on the context and specific circumstances of the estate or trust. Here's a summary to help clarify: Duration of Authority: Trustees often have ongoing responsibilities and powers that can extend indefinitely, while executors have a more limited, temporary role.
Should The Guardian and Trustee Be Different People or the Same? Whether you select the same person to act as guardian for your minor child and successor trustee for your child's inheritance will likely be based on the ability and capacity of the specific person.
An executor does not possess the power to overrule or change the terms established by a trust; these roles carry separate responsibilities. An executor's role consists of overseeing and closing an estate as per its will's instructions without disrupting or interfering with their independent functions as trustee.
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.
Two siblings can share power of attorney, allowing them to jointly manage a loved one's affairs. This arrangement requires careful consideration of various aspects to ensure efficacy and harmony.
Anyone 16 and over (18 for an Unincorporated Association or Charitable Trust) who is not 'disqualified' can be a Trustee. The reasons for disqualification were set down by the Charities Act 2011, and were designed to prevent people convicted of financial crimes, or who made serious financial errors, becoming trustees.
In short, yes, a person holding a power of attorney can also be a beneficiary in a will. However, there are important considerations and potential conflicts of interest to be aware of.
Attorneys as Trustees
Attorneys in California are uniquely positioned when it comes to serving as fiduciaries. They do not require additional licensing to serve as trustees, executors, or conservators, unlike other non-relatives.
While in some situations it is appropriate for a sibling or other family member to serve as trustee, in many cases, particularly with a larger trust, naming a family member is not the best decision, for several reasons. First, clients fail to appreciate the amount of work involved in being a good trustee.
WHO IS THE “RIGHT” TRUSTEE? A natural first inclination is to consider a family member or trusted friend who knows you and your philosophies and values well. Family or friends may personally know your beneficiaries and their needs.
Trustees generally do not have the power to change the beneficiary of a trust. The right to add and remove beneficiaries is a power reserved for the settlor of the trust; when the grantor dies, their trust will usually become irrevocable. In other words, their trust will not be able to be modified in any way.
When title to real property is held in the name of the trustee, as trustee of a specific trust, the property is an asset of the trust. As such, the powers granted by the POA do not apply to it.
An executor has the authority from the probate court to manage the affairs of the estate. Executors can use the money in the estate in whatever way they determine best for the estate and for fulfilling the decedent's wishes.
A common misunderstanding is that the trust owns the property within it. This is not really true. The trustee of the trust holds legal title to the trust property. The trust beneficiaries hold beneficial title to the trust property.
A trustee must abide by the trust document and the California Probate Code. They are prohibited from using trust assets for personal gain and must act in the best interest of the beneficiaries. Trust assets are meant for the benefit of the trust beneficiaries and not for the personal use of the trustee.
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.
While executors have discretion in some areas, your core decision-making is bounded by: The deceased's will. You must follow their distribution wishes rather than diverging based on your own judgments.