In family caregiving you will find that you need to learn terminology of both the medical and legal professions. In this week’s blog post I’ll cover definitions for Power of Attorney (POA) and Trustee. I’ll help you understand the differences and similarities between the two and why you might want one rather than the other.
What is a POA
A Power of Attorney, also called an “agent” or “attorney-in-fact” is someone designated to make decisions on behalf of another person. These decisions might be broad, including personal financial or health issues, or may be very specific like selling a vehicle. There are different types of POA agreements such that limit the powers the agent has or that determine when or how long the agreement is in effect.
For family caregiving, it is most common to have what’s called a Durable POA. A Durable POA remains in effect even after the person you’re making decisions for has become ill or incapacitated. This type of POA is most common for health care decisions and must be used in combination with HIPPA authorization.
A POA is good to have in place because it allows someone to choose who will act on their behalf rather than having the court appoint an unknown guardian for their affairs who may act without the family’s concerns in mind.
What is a Trustee
A Trustee is an individual given the power to make decisions regarding the maintenance, performance, and profitability of the trust—property and assets—under his or her guidance, per the given instructions. A Trustee is expected to act in the best interest of the party they represent, without making any profit or use of the resources they control.
A caregiver will need to be appointed as Trustee if they are to help manage their loved one’s property or assets or enact a Will or Trust, including Living Trusts. This might mean simply recording expenses and income, or filing taxes, or selling property to cover end-of-life expenses. There are a host of situations in which having a Trustee assigned can help a loved one, and again avoid having the courts make decisions for them.
Typically, the person who sets up the Trust will act as the trustee until they no longer can make decisions and then the Successor Trustee appointed in the document will take over.
POA, Trustee or Both?
As a family caregiver, if your responsibilities are limited to health-related issues, a POA is sufficient for your needs. However, if your loved one has reached the point where they have difficulty making clear and rational decisions, being Trustee will allow you to act on their behalf regarding property and assets. In many cases, you will want to have both legal documents in place.
