Ask a Lawyer : Chapter 24 - Advance Directives

Trust or Advance Directive?

Q. In protecting assets in case of disability, is a living trust preferable to a durable power of attorney?

A. I think so. Your living trust will provide a trustee or trustees to protect your property. The trustees will follow the instructions you have set out in the trust. Your trustees will be held to highest standard of care under the law. Also, your trust will be coordinated with your health care documents to ensure that your interests are protected.

A trust can provide extensive instructions for disability planning, and the trustees are held to a much higher standard of care than an agent under a power of attorney. A trust is appropriate for smaller estates as it will better protect the client in the event of disability and save the costs inherent in probate. Also, most powers of attorney contain a list of powers with little or no instruction. They are like giving someone a blank check to one’s assets.

I use special durable powers of attorney in conjunction with my trusts to address issues where it may be inconvenient, prudent, or in appropriate to get the trust involved. Resigning from fiduciary positions is an example of a matter addressed by my special powers of attorney.

Giving Control without Ownership

Q. I'm concerned about the disadvantages of joint bank accounts. Is there another way that I can give someone access to my bank account without giving that person ownership of my money?

A. You can put your account into your revocable trust. Your trustees will then have access to your account without actually owning it. As trustees, they will be held to the highest standards under the law, and they will follow the instructions you established in your trust.