Powers-of-Attorney, Wills,Trusts; Agents, Executors, Trustees - What do they do and when do they do it?

Many people are not clear on the differences between Powers-of-Attorney, Wills, and Trusts. This is a quick basic explanation. I hope it helps.

A Power-of-Attorney (POA) is a document that grants one person the authority to take action and enter into commitments for another person. The person giving the authority is known as the Principal. The person given and exercising the POA is known as the Agent for the Principal. The POA is only good while the Principal is living. Once Principal passes, the POA is extinguished.

A Will is a document that directs the distribution of a person's assets, their things, after they pass.  The person having the Will prepared for their assets is the Testator. The Executor oversees the distribution. The property of the deceased is the Estate. The handling of the Estate is known as administering the Estate or the Administration of the Estate. A Will has no effect until the Testator passes.

A Trust is an agreement between a property owner and a second person or entity to take possession of the property and maintain it for the benefit and use of a third person, group of people, or an organization. The property owner establishing the Trust is the Settlor. The property usually includes money and investment accounts. It can include real property and other assets as well. The person who manages the Trust is a Trustee. The Trustee owes a special duty to the Settlor. It I called a fiduciary relationship. The Trust can be established before or after the settlor's death.

This a simple description to help people understand the basic concepts.  If you want assistance, legal representation, or just want to know more about Mark M. Medvesky or Wells, Hoffman, Holloway & Medvesky LLP, check out our website at www.whhmlaw.com.


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