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Similarities between a Living Trust and a Power of Attorney


Both documents can allow for another individual to manage your assets in the event that you can’t. For a living trust, that person is called the trustee (or in some cases, the alternate trustee.) In a power of attorney, that person is known as the agent.

In other words, if you’re incapacitated, both documents would allow someone you trust to use your assets to pay for needed medical care.

Differences between a Living Trust and a Power of Attorney


That said, it’s important to note one crucial difference: a living trust gives someone (the trustee) the ability to use your money for hospital expenses, but it gives them no direction as to what medical decisions you’d like made. A power of attorney, on the other hand, can give someone the permission to use assets for your medical care and give them instructions as to what medical care you’re willing to undergo.

Some people, for example, may choose not to be resuscitated if their heart were to stop. Others may not want to donate their organs. Still others might have religious beliefs that render certain procedures an impossibility. A power of attorney allows you to make those choices, in addition to providing assets by which to pay for them. A living trust simply does not.

You should think of a living trust, then, as simply for your money, belongings, and assets. It can be the smartest way to divide certain assets after you pass---or even while you’re alive---but it will not allow anyone to make healthcare decisions for you. For that, you’ll want to create a durable power of attorney.

There are other differences and similarities between a living trust a power of attorney. Knowing what each does is an essential part of your estate plan. You can learn more at our power of attorney learning center, wills center, or our estate planning page. <

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.


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