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Responsibilities that come with power of attorney

Establishing a trust for someone with a disability requires finding someone to whom to grant power of attorney. A power of attorney gives the assigned entity the right to make decisions on another person's behalf.

The individual with power of attorney is known as the trustee. The trustee is the delegate for the trust and administrates the funds toward that individual, also known as the beneficiary. In most cases, the trust remains in effect until it is financially exhausted or the beneficiary dies.

This type of arrangement is known as a special needs trust and is typically designed for an individual that cannot make decisions for themselves. Therefore, the trustee gains power of attorney and makes financial decisions to support the beneficiary's needs. The trustee is often related to the beneficiary. However, the court can approve an unrelated individual's power of attorney if a family member is unavailable.

In circumstances where the beneficiary is underage or fairly young, the court is very selective about who becomes the trustee and receives power of attorney. Having a power of attorney gives the trustee the ability to hire assistants, pay educational expenses, allocate recreational money, and cover furnishing and medical expenses on the beneficiary's behalf through trust funds.

Setting up a trust and assigning a power of attorney for someone with a disability requires careful planning to make sure the beneficiary is properly provided for during life. An attorney with experience in estate planning may be able to assist those seeking to establish a special needs trust to ensure their loved one's needs are addressed.

Source: FindLaw, "Special Needs Trusts FAQ's", October 16, 2014

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