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  1. #1
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    Aug 2015
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    Default Conflict Between a Living Trust and Durable Power of Attorney

    My question involves estate planning in the state of: Missouri

    My elderly father recently decided to plan for his passing with a Power of Attorney and a Living Trust. This was not thoroughly researched, and was instigated by my younger brother.The trust and POA are documents that were printed off the internet. A lawyer was never involved, and I was out of town when this happened.

    The Living Trust is a collective trust, revocable, with both myself, and my brother having equal powers. "The purpose of this agreement is to establish a Trust to receive and manage assets for the benefit of the Grantor, during the Grantor's lifetime, and to further manage and distribute the assets of the Trust upon the death of the Grantor." The trust was dated May the 5th, of 2015, and has not been revoked.

    There is also a Durable Power of Attorney involved, which lists a lot of the same powers as the living trust, and it's dated after the trust. But, the POA lists my brother as being the immediate attorney- in-fact, and myself as being a successor. This document is dated after the Living Trust. It has not been revoked.

    What I have found, is that any institution which has interests in these documents, only have one, the POA. None of them have a copy of the Living Trust. I am not sure why this is, and I have not approached my brother, who as I stated, started the ball rolling on this. I do know that he is the one who handed the POA out, and not the Living Trust along with it. I do not with to talk with him about this, until I am certain of what I know concerning this issue.

    My questions are: "Are these documents in conflict with each other, assuming that I give the Trust to concerned parties?" "Does one document override the other?" "Should I give the Trust to all concerned entities?"

    Any other comments and concerns are welcome. Thanks!

  2. #2
    Join Date
    Mar 2013
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    Default Re: Clash Between Living Trust and Durable Power of Attorney

    Without being able to read both documents, but having some familiarity with trusts and POAs, my purely educated guesses are:

    Quote Quoting JLD01
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    "Are these documents in conflict with each other,
    Probably not.

    Quote Quoting JLD01
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    "Does one document override the other?"
    Possibly.

    Quote Quoting JLD01
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    "Should I give the Trust to all concerned entities?"
    That's up to you.

    Under the trust laws of most states, beneficiaries and trustees are entitled to know the terms of the trust, if not entitled to copies.

    As for other "concerned entities" it depends on who those concerned entities are and why they would need a copy.

    If you have copies of the trust and the POA I strongly suggest you take them to a trust/estate attorney for a thorough review and advice.

    Do this NOW while there is still time to fix anything that's wrong.

    What you'll spend on an attorney now is a pittance compared to what you'll spend or lose when your father dies and there is a mess left behind.

  3. #3
    Join Date
    Jan 2006
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    Default Re: Clash Between Living Trust and Durable Power of Attorney

    While the poa and trust are linked due to the grantor of the trust and principal of the poa being the same party they are separate entities and involve different issues. The poa allows the agent to act on behalf of your father while the status of trustee allows you and brother to control the actions of the trust. (And why isn't your father the trustee until such time he is incapable of doing so?).

    As to "handing out" copies of the trust; other than something that proves you or brother to be trustees, the rest is nobody else's business. A trustee is empowered by the trust to act as the trust describes. The only entities that have the power to object (while your father is competent) to the actions of the trustee is your father. Other than proof a person is a trustee, banks and such have no involvement in the activities of the trust. That is between your father and the trustees. There is no need any particular party or entity be informed of the trust matters unless they are involved with the matters of the trust.


    So, given your position of trustee and having no powers based on the POA, you have no rights to be informed of anything regarding your father's issues unless some asset is placed within the trust. Once within the trust you would have the same rights and privilege as your brother.


    I don't know if that answered any of your questions though. I am not really understanding what your real concerns are.

  4. #4
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    Default Re: Clash Between Living Trust and Durable Power of Attorney

    It sounds like there may have been an intention to transfer certain property or accounts into the trust, but that the transfer never occurred. If, for example, a bank account is held by a trust, the financial institution is going to want a copy of the trust, not a power of attorney that applied prior to the transfer.

    If dad is still mentally competent, it would be sensible to get a bona fide estate planning lawyer involved to try to clean up the mess.

  5. #5
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    Oct 2006
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    Default Re: Clash Between Living Trust and Durable Power of Attorney

    I am going to throw out some additional information.

    With a revocable trust, its common for the trust to not actually be funded until the person passes away. The reason for that has a lot to do with tax, as with a revocable trust the assets and income remain the property of the grantor of the trust for tax purposes, and its less complicated to handle if the trust is not funded until the grantor passes away. Once the trust is eventually funded, you and your brother will equally control the assets.

    Until the trust is funded, the assets remain in your father's name and are subject to the POA if your father is unable to act on his own behalf. As long as your father is competent, your brother cannot (or should not) use the POA.

  6. #6
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    Default Re: Clash Between Living Trust and Durable Power of Attorney

    Quote Quoting llworking
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    . As long as your father is competent, your brother cannot (or should not) use the POA.
    absolutely incorrect.

    Not only can brother use the POA, there are many situations where he may use it while dad is fully competent. If one wants a POA to not be effective until such time the principal is incompetent, one would use a springing POA.

  7. #7
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    Default Re: Clash Between Living Trust and Durable Power of Attorney

    Quote Quoting jk
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    absolutely incorrect.

    Not only can brother use the POA, there are many situations where he may use it while dad is fully competent. If one wants a POA to not be effective until such time the principal is incompetent, one would use a springing POA.
    That is why I said cannot (or should not). I am my mothers POA. I will never touch a penny of hers, for any purpose, unless it reaches the point where she becomes incompetent, which I do not expect will ever happen.

    We do not know the wording of the particular POA, therefore it could prevent him from using it if dad is still competent. In addition, if he uses it while dad is still competent, and dad is unhappy about that, dad can revoke the POA.

  8. #8
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    Jan 2006
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    Default Re: Clash Between Living Trust and Durable Power of Attorney

    Quote Quoting llworking
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    That is why I said cannot (or should not). I am my mothers POA. I will never touch a penny of hers, for any purpose, unless it reaches the point where she becomes incompetent, which I do not expect will ever happen.

    We do not know the wording of the particular POA, therefore it could prevent him from using it if dad is still competent. In addition, if he uses it while dad is still competent, and dad is unhappy about that, dad can revoke the POA.
    it is not a cannot nor a should not issue. A POA is fully effective upon the date it is stated it becomes effective. I have known many people that were acting as POA for another that would go the banks for them as well as myriad other activities they could not do if there was no POA.


    as to the wording of the POA and it not allowing brother to act until dad is incompetent: that would be a springing POA but if you would read the thread you will see that it is fairly apparent it is not a springing POA.


    The Living Trust is a collective trust, revocable, with both myself, and my brother having equal powers. "The purpose of this agreement is to establish a Trust to receive and manage assets for the benefit of the Grantor, during the Grantor's lifetime, and to further manage and distribute the assets of the Trust upon the death of the Grantor." The trust was dated May the 5th, of 2015, and has not been revoked.
    a further statement:

    What I have found, is that any institution which has interests in these documents, only have one, the POA. None of them have a copy of the Living Trust
    suggests it is currently in effect as if it were not, there would not be any institution that would have any interest in the POA.

    There is also a Durable Power of Attorney involved, which lists a lot of the same powers as the living trust,
    a durable POA is designed to be effective both before and after any period of incompetence. A springing POA is intended to be effective only after the principal may become incompetent.


    In addition, if he uses it while dad is still competent, and dad is unhappy about that, dad can revoke the POA
    well, duh!!!!


    I am my mothers POA. I will never touch a penny of hers, for any purpose, unless it reaches the point where she becomes incompetent, which I do not expect will ever happen.
    A POA can involve much more than "touching their pennies". It can allow the agent to sign documents and pretty much anything the principal can do.

  9. #9
    Join Date
    Apr 2009
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    Default Re: Clash Between Living Trust and Durable Power of Attorney

    I'm not certain if anybody directly asked this question. Therefore, I'll toss it out:

    Was the trust funded with assets?

  10. #10
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    Oct 2014
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    Default Re: Conflict Between a Living Trust and Durable Power of Attorney

    Quote Quoting JLD01
    View Post
    My question involves estate planning in the state of: Missouri

    My questions are: "Are these documents in conflict with each other, assuming that I give the Trust to concerned parties?" "Does one document override the other?" "Should I give the Trust to all concerned entities?"

    Any other comments and concerns are welcome. Thanks!
    They are not in conflict with each other as the power of attorney and the trust deal with different assets. The trust only handles assets that have been transferred to it. The trustees of the trust only handle the trust assets and only have the powers that the trust instrument gives them. The only persons who would care about having the trust documents are those that would either have an interest in the trust (e.g. beneficiaries) or would be involved in some way with trust assets (e.g. if the trust opens a bank account, the bank will want a copy of the trust).

    A POA is simply a document that confers on the agent (your brother, and you as successor) the power to do certain things for the principal (your father). The principal may only give authorization to the agent to do things that the principal himself may do, e.g. handle certain financial matters of the principal, etc. The principal does not own the assets in the trust, however, so the agent has no power to do anything with trust assets. The agent might be empowered to transfer assets of the principal to the trust, however.

    So, neither document “overrides” the other. Those who need to see a copy of one of those documents will generally ask to see them.

    But I strongly suggest getting Dad into an estate planning attorney. I assume your brother is not an attorney and thus he had no business printing forms off the net and completing them for your father to sign; technically he violated the law against the practice of law. More significantly for your father, your brother may have botched things badly with what he’s done. I can’t count the number of bad wills, trusts, etc., that I’ve seen people pull off the internet and use, really screwing things up and costing a lot to fix, if it’s fixable at all. Best to ensure it’s done right while your father is alive and still competent.

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