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POA on a Revocable Trust Account
Answer by John Burnett, BOL Guru
Guru Bios
Question: Is it possible to have a revocable trust account where you have set up a person to be a power of attorney on the account along with the trustee (only 2 signers on account), where the POA is also a successor trustee?
Answer: It's not generally permitted for a trustee to grant a power of attorney that covers the trustee's authority or responsibilities. If a state's trust law will permit it, the trust document would have to spell out the fact that the trustee could make such an appointment.
Individuals who have issued powers of attorney often think that those documents can be used to cover fiduciary responsibilities (such as those of a trustee). That is simply incorrect. A power of attorney granted by an individual can only cover actions on behalf of the grantor as an individual. It cannot cover actions or duties of the grantor as an officer or employee of a business or as a fiduciary.
Before accepting any power of attorney in connection with a trust, read the trust agreement to see if a power of attorney can even be used. Then refer the question to your bank's counsel before proceeding.
First published on BankersOnline.com 11/27/06
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