What’s the Difference Between a Living Trust and Power of Attorney?

When it comes to estate planning, there are some basics that everyone should have, but there are also some tools you might or might not need depending on your individual goals.

A living trust gives a person known, as a trustee, the ability to use your money for certain expenses, such as those from a hospital, but it does not give them clear direction about the kind of medical decisions you’d like to make. This is where a power of attorney document can be more beneficial.

A power of attorney, when appropriately drafted by a lawyer, can give a person the permission to use assets for your medical care and to give them instructions about the type of medical care you’re willing to undergo. You might have personal feelings that should be documented and explained to your power of attorney agent.

For example, if your heart were to stop you might not wish to be resuscitated. Other people might have strong beliefs about donating or not donating their organs. A power of attorney allows you to make these important decisions, in addition to providing assets with which to pay for them.

A living trust is very beneficial for dividing certain assets after you pass away or even while you’re still alive, but it does not allow other people to make health care decisions for you. You need a separate document for that, known as a durable power of attorney. For more questions about making medical decisions and appointing people to make these crucial care choices for you, schedule a consultation with a Michigan estate planning lawyer.

 

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