Trustee vs Power of Attorney: Which one is Better Option For You?

Understanding legal roles like Trustee and Power of Attorney can feel confusing. Both are important, especially when planning for the future or managing money and property. Even though they seem similar, they have different purposes and responsibilities.

In this guide, we’ll break down the key differences between a Trustee and a Power of Attorney in a way that’s simple and easy to understand. Whether you're planning your estate or helping a loved one, knowing the difference between these two roles can help you make the right decisions.

What is a Trustee?

A Trustee is a person or company that manages a trust. A trust is a legal document that holds money, property, or other assets for someone else. The person who creates the trust is called the grantor or trustor. The people who benefit from the trust are called beneficiaries.

The Trustee’s job is to take care of the assets in the trust and make sure they are used the way the trust says they should be. Trustees have a legal duty to act in the best interest of the beneficiaries.

Common Duties of a Trustee:

• Managing investments or property in the trust
  
  
• Paying bills or taxes related to the trust
  
  
• Distributing money or property to beneficiaries
  
  
• Keeping records and reporting on trust activity
  
  

Trustees can be a trusted friend, family member, or a professional like a lawyer or financial advisor.

What is a Power of Attorney?

A Power of Attorney (POA) is a legal document that gives someone else the authority to make decisions for you. The person who creates the POA is called the principal, and the person who gets the power is called the agent or attorney-in-fact.

There are different types of POA:

• General Power of Attorney: Gives broad powers to handle finances, property, and more.
  
  
• Durable Power of Attorney: Stays in effect even if the principal becomes unable to make decisions.
  
  
• Medical Power of Attorney: Gives the agent the ability to make healthcare decisions.
  
  

The agent under a Power of Attorney can act on your behalf, but only while you’re alive. The POA ends when you die.

Key Differences Between Trustee and Power of Attorney

Even though Trustees and agents under Power of Attorney both help manage your affairs, their roles are different. Here’s a breakdown of the main differences:

1. When Their Authority Starts and Ends

• A Power of Attorney starts when you sign the POA form. It ends when you cancel it or when you die.
  
  
• A Trustee starts managing the trust after it is created and often continues to manage the trust even after you die.
  
  

2. What They Control

• A Power of Attorney gives someone power over your personal property and money.
  
  
• A Trustee only controls what’s in the trust, not your personal bank account or house (unless those things are placed in the trust).
  
  

3. Who They Represent

• A POA agent represents you, the principal. They act as if they were you.
  
  
• A Trustee does not represent you. They represent the trust and act on behalf of the beneficiaries.
  
  

4. What Happens When You Die

• A Power of Attorney ends when you die. The agent can no longer act for you.
  
  
• A Trustee continues to manage the trust after your death, making sure assets are passed to your beneficiaries the way the trust says.
  
  

Real-Life Example

Let’s say Maria creates a living trust and puts her house and investments into it. She names her daughter, Sarah, as the Trustee. Maria also gives her son, David, Power of Attorney to manage her personal bank account.

One day, Maria becomes too sick to handle her affairs.

• David uses the Power of Attorney to pay Maria’s medical bills from her personal account.
  
  
• Sarah, the Trustee, manages the house and investments in the trust.
  
  

After Maria passes away:

• David’s Power of Attorney is no longer valid.
  
  
• Sarah continues to manage the trust and gives the trust property to the people Maria named in the trust.
  
  

Can One Person Be Both?

Yes, one person can be both the Trustee and the agent under Power of Attorney, but only if they were chosen for both roles. This is common in families. For example, an adult child may be named as both the POA and Trustee to make things easier.

Even though one person can have both roles, they still have to act within the limits of each job. The Trustee only controls what’s in the trust. The Power of Attorney agent only controls what the principal owns personally.

Why You May Need Both

Some people think having just a trust or a Power of Attorney is enough. But having both gives you stronger protection and flexibility.

• The trust handles long-term planning and makes sure your assets go to the right people after you die.
  
  
• The Power of Attorney lets someone help you while you’re alive, especially if you get sick or can’t make decisions for yourself.
  
  

Without a POA, someone may need to go to court to become your legal guardian. Without a trust, your family may have to go through probate court after you die.

How to Choose the Right People

Choosing your Trustee and Power of Attorney agent is an important decision. These people should be:

• Responsible and trustworthy
  
  
• Good at keeping records
  
  
• Able to make decisions in your best interest
  
  
• Willing to follow your wishes, even if they disagree
  
  

It’s also smart to name backup people, just in case your first choice can’t do the job.

Florida Laws on Trustees and Power of Attorney

Florida has its own rules for both trusts and Powers of Attorney. For example:

• Florida requires that the POA be signed in front of two witnesses and a notary.
  
  
• Trustees in Florida have specific duties under state law, like acting with loyalty and keeping beneficiaries informed.
  
  

If you live in Florida, it’s a good idea to work with an estate planning attorney who understands local laws.

Final Thoughts

Trustees and agents under Power of Attorney are both important roles, but they serve different purposes. A Trustee manages a trust and continues their work after your death. A Power of Attorney helps with personal matters while you’re alive.

Having both in place gives you peace of mind and protects your family from stress and legal problems. Take the time to understand each role and choose the right people for the job.

Need help creating a trust or setting up a Power of Attorney in Florida? Contact Florida Tax Lawyers today for expert estate planning assistance.