Power of Attorney vs Living Trust
Planning for the unforeseeable future can be tricky. Many people assume creating a will is all you need to do, but there are more steps to consider than that. To truly protect your assets and make life easier for your loved ones, consider getting a power of attorney and a trust in place before you find yourself in the unfortunate position of needing one.
What Does a Trust Do for Me?
A trust is a document that tells others exactly what you want done with the assets you listed, should you ever become incapable of making decisions for yourself. Think of a trust as a bucket and, to prepare that trust, you have to fill that bucket up ahead of time with the assets that are most important to you. You can designate a friend, relative, or professional trustee to oversee your trust when the time comes.
What Does a Power of Attorney Do for Me?
A power of attorney is a document that takes care of the assets that are outside of the trust. Whoever you designate with this power can make decisions for you regarding things like your bank accounts, investments, or real estate. They can also make legal claims or file taxes on your behalf.
Do I Need Both?
Yes, your best bet is to have both. A living trust is good to have because it specifically outlines your wishes. Whoever you put in charge has a clear understanding of how you want your assets to be managed. A power of attorney is also good to have because it gives someone of your choice the power to make decisions on your behalf for anything else that isn’t included in the trust, like a 401k or jointly-held property.
Your next step is to join our facebook group called “Parents Protecting Assets in California”. We provide valuable information on protecting assets from future in-laws and creditors!