A Living Trust holds the legal title to the property that is legally yours. This Living Trust helps keep it out of your “estate” that automatically goes on probate after your death. The Living Trusts have a plan of distribution that in many cases is implemented with ease and attracts lower cost in comparison to a probated estate. If you avoid the probate, your heirs will be spared the expenses open to the public probate process that may be quite cumbersome. A Living Trust also enables you to have flexibility in providing long term tax benefits for your family or beneficiaries. The assets under the Living Trust are then distributed evenly without court intervention and management. There could be multiple trusts after your death that help support your spouse and also provide for your kids and local charities. These trusts can also provide financial support to many generations in a family.
A Durable Power of Attorney on the other hand is someone that can act on your behalf and take decisions in respect of your personal, financial and business affairs in case you are incapacitated. It is also known as the “Springing” Power of Attorney as this individual springs into action only when you become incapable of managing your own affairs. You can fit a document with special powers that enable you to transfer powers to the “Attorney in fact”. These powers include signing of cheques, paying bills, opening and closing financial accounts along with handling tax matters and selling property on your behalf. A Durable Power of Attorney also can manage your retirement plans and provide continuity in the management of your affairs when you are not in a position to manage them due to failing health or a certain injury caused by or due to an accident.