How Does a Trust or a Power of Attorney Help You Avoid Losing Control Over Your Money When You Can't Take Care of Yourself?

A friend passed on this article to me about folks who lose their inheritance because their parents were taken advantage of my hired caretakers. Unfortunately, what I have found is that many adult children will take these articles to their parents and thrust them in their face and tell them "this is what could happen to you...you need to get this taken care of...etc.etc." Then when their parents don't respond, they say to me that they just can't get their parents interested in this stuff.

Parents - does this sound like something you have seen or heard? Here is a fact that I share with people that is often ignored by adult children when it comes to their parents - "Mom and Dad most likely know exactly what they want, but they don't want or need anyone else to tell them what they want."

Now that being said, I thought that providing some additional general information on how you can ensure control over your property and finances when you are unable to take care of yourself or your spouse would be helpful. A properly drafted power of attorney and a revocable living trust are two tools that can help anyone achieve the goal of maintaining control when they are unable to handle their finances.

A power of attorney can be drafted to instruct someone on how they should take care of you, your spouse, kids and whoever else you want when you can't take care of yourself or them. Your power of attorney can provide very specific powers when it comes to investing money on your behalf, operating or managing businesses, or when it comes to providing for your comfort. Let's say you haven't missed a Red Sox game in 25 years...a properly drafted power of attorney can help make sure that your tickets are purchased and your transportation and care during the games are provided for the rest of your life. How's that for ensuring you are in control!

A revocable living trust can provide the same benefits as the power of attorney only it is even better. Why? Because, the power of attorney is only good if the financial institution holding your money wants to honor it. On the other hand, a trust gives you much greater assurance that this won't be a problem. If you aren't sure whether or not your power of attorney will be accepted by the financial institutions you have your money with, you should ask your financial advisor. Unfortunately, even if the answer is that it is good today, there is no guarantee like the one that exists for a trust next year, or the year after that. So the moral of the story here is that the revocable living trust is a much better tool for ensuring that your financial needs and wants are met when you aren't able to take care of yourself.