Assets held in trust aren’t subject to the time and expense of probate, which may be substantial. Image: sasirin pamai/Shutterstock.com
By: FEDweek StaffAlthough you might not want to think about it, there’s a chance that you could lose the ability to manage your own affairs, as you grow older. If that happens, you might make bad investments, get ripped off, or lose vital services because your bills weren’t paid. To prevent these possible disasters, you can create a durable power of attorney.
This document appoints one or more competent adult individuals (the “agent” or agents) to act on your behalf. The named agent can perform any legal task that you have the right to do, such as sign checks, gain access to a safe deposit box, collect Social Security, file tax returns, and so on. A “durable” power is different from other powers of attorney in that it continues to be valid even if you, the “principal,” become incapacitated.
If you want to prepare such a durable power of attorney but you do not want the agent’s authority to take effect until you become incapacitated, you can create a springing power of attorney. This type of power becomes effective only upon certain events. You might specify, for example, that two doctors must certify–in writing–that you are incompetent.
Don’t create a revocable living trust for tax benefits, because such trusts don’t save estate or income tax. So why would you consider this type of trust?
* Probate avoidance. Assets held in trust aren’t subject to the time and expense of probate, which may be substantial. At your death, a successor trustee takes over the trust assets without court oversight. Moreover, if you place any property you own in another state into the trust, that property will avoid “ancillary” probate, which generally affects out-of-state holdings.
* Incompetency protection. If you lose the ability to manage your own finances, a successor trustee will step in. That trustee will have a fiduciary responsibility to manage trust assets for your well-being.
If you do create a revocable living trust, it’s critical to re-title assets so they’re held by the trust. Otherwise, you and your heirs won’t get the advantages such a trust can offer.
OPM Advises Agencies on Conducting RIFs During Shutdown
Updated Shutdown Contingency Plans Show Range of Impacts
Use Shutdown as Justification for More RIFs, OMB Tells Agencies
Unions Win a Round in Court Disputes over Anti-Representation Orders
Deferred Resignation Periods End for Many; Overall 12% Drop
Senate Bill Would Override Trump Orders against Unions
TSP Adds Detail to Upcoming Roth Conversion Feature
See also,
Legal: How to Challenge a Federal Reduction in Force (RIF) in 2025
How to Handle Taxes Owed on TSP Roth Conversions? Use a Ladder
The Best Ages for Federal Employees to Retire
Best States to Retire for Federal Retirees: 2025
Retention Standing, ‘Bump and Retreat’ and More: Report Outlines RIF Process
