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Living Trusts & POA

Question: If a person is a signer to an irrevocable living trust, is the Power of Attorney of that signer able to sign on her behalf for that trust? For instance, the primary owner of the trust is Lydia Hasabundle, Living Trust - PRIMARY OWNER. It also has Trudy Trustworthy, AUTHORIZED SIGNER or Barbara Hurst, AUTHORIZED SIGNER. Would the POA of Trudy or the POA of Barbara be able to sign on this account?

Answer: Typically, a fiduciary (such as a trustee) cannot delegate duties to a third party. There are some states, however, that have specific statutes that allow a trustee to appoint an agent. You would need to see if your state has such a statute.

If it does, the POA may still not be sufficient. Let's say Barb is the trustee of Lydia's trust. Barb has given Dorothy Dogood a general POA. That general POA would be to allow Dorothy to act as Barb's attorney-in-fact with respect to Barb's personal assets, for Barb's benefit - it would not normally affect the trust at all. Barb would have to execute a specific POA in her capacity as trustee of the trust, appointing Dorothy her Attorney In Fact (AIF) to perform acts as her agent relating to the trust. A standard POA from Barb to Dorothy that does not specifically mention the trust and does not mention the fact that Barb is executing it in her position as trustee will not do the trick.

And there is another caution. You must examine the trust to see if the appointment of a POA is permitted or forbidden. It may state one or the other right in the trust agreement.

Copyright © 2003 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 12, No. 11, 2/03

First published on 02/01/2003

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