What is the difference between a Trustee and a Power of Attorney

Managing one’s personal and financial affairs can be a daunting task, especially for those who are elderly, ill, or have special needs. In such cases, individuals often seek the help of others to manage their affairs. Two common ways of delegating this responsibility are through a Power of Attorney (POA) and a Trustee. Although both involve delegating authority to someone else to act on behalf of the individual, there are some key differences between the two.

A Power of Attorney is a legal document that authorizes an individual (known as the “Agent” or “Attorney-in-Fact”) to act on behalf of the individual who created the POA (known as the “Principal”). The POA can be general or specific and can be used to delegate a range of powers, such as the power to make financial decisions, sign legal documents, or make healthcare decisions. The POA can be effective immediately upon execution or become effective at a later time, such as when the Principal becomes incapacitated.

In contrast, a Trustee is a person or entity (such as a bank) who manages and administers assets that have been placed in a trust for the benefit of one or more beneficiaries. The person who creates the trust (known as the “Grantor” or “Settlor”) transfers assets into the trust, and the Trustee is responsible for managing and distributing those assets according to the terms of the trust document.