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Minimizing Power of Attorney Risks: Adult Children as Trustees

 Posted on May 07, 2024 in Estate Planning

Blog ImageA comprehensive estate plan should involve both a trust and powers of attorney. Powers of attorney and trusts both have a legal impact during your lifetime. When you create a trust and transfer property into the trust, the trust as an entity becomes the owner of all property placed in it. Unless you use an irrevocable trust for asset protection, you can still retain complete control over the property you place in your trust during your lifetime. Your powers of attorney most likely have an effect only if you become incapacitated during your lifetime. Should this occur, your agent can take control of things like your financial affairs and medical decisions.

One way to minimize the risks associated with powers of attorney is to add your adult children as trustees during your lifetime. A Kendall County, IL estate planning lawyer can help you devise an estate plan that protects you and your beneficiaries.

How Making Your Adult Children Trustees Reduces the Risks of Powers of Attorney

There is always some risk associated with creating powers of attorney to plan for future incapacity. When the POA takes effect, the agent you name may have quite a bit of control over both your person and your financial affairs. Most POAs used in incapacity planning are springing POAs, meaning they have no effect until you are incapacitated. There can be some legal conflict between your agent’s power to manage your financial affairs and your trustee’s power to manage your trust property.

Generally, when your springing POAs take effect, your successor trustees can step in and begin managing or administering your trust according to your instructions. However, you can set up your trust so that you are the sole beneficiary during your lifetime. This would mean that your trustees are required to act in your best interests while you are alive.

By making your adult children your successor trustees, you can lower the risk of financial mismanagement by the person you name in your POA for property and finances. You are essentially bestowing a fiduciary duty to manage the trust in a way that is best for you upon anyone you name as a trustee. This adds an additional layer of protection for you should you become incapacitated during your lifetime.

Contact a Yorkville, IL Estate Planning Lawyer 

Gateville Law Firm designs comprehensive estate plans comprised of multiple documents that work in harmony. Experienced Kendall County, IL estate planning attorney Sean L. Robertson is uniquely skilled in creating highly complex and protective estate plans. Contact us at 630-780-1034 for a complimentary consultation.

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