A Trust Can Be a Helpful Tool For Incapacity Planning
When a health condition or injury renders Florida adults no longer able to handle their own affairs, they need a representative to step in and speak for them. Usually there are two types of representatives. One representative handles medical issues and one representative handles financial issues. The representative handling financial issues can either be an agent under a durable power of attorney, a trustee under a trust or in cases of a failure to plan ahead, a guardian appointed by the court.
In Florida, an agent under a durable power of attorney can perform only the duties that are specifically stated in the durable power of attorney. When someone wants to make a change to their durable power of attorney document, they cannot amend their existing durable power of attorney. Instead, they have to revoke their existing durable power of attorney and put a new replacement durable power of attorney in place instead.
However, someone having a copy of the former durable power of attorney (like the bank) may not know that the former durable power of attorney has been replaced. Therefore, sometimes as a durable power of attorney gets older it becomes more difficult to use because the people being asked to honor the older durable power of attorney are not sure if it is still the current one because so many years have gone by since it was signed.
A trust on the other hand is a bucket with instructions in it. The trustee takes care of the bucket and is allowed to do anything that the instructions in the bucket allow. If someone wants to update or change the instructions in their trust bucket, they can amend the instructions. This ability to amend the original instructions creates a complete paper trail that stays contained in the trust bucket. This complete paper trail helps to eliminate uncertainty about who is the trustee and uncertainty about what the trustee is allowed to do. This absence of uncertainty can sometimes make an older trust easier to use than an older durable power of attorney.
So, if incapacity is a worry for your future, you may want to explore putting a trust in place to avoid the uncertainty that can sometimes make an older durable power of attorney harder to use than an older trust.