Legal Question in Wills and Trusts in North Carolina

I have had a Power of Atty for two years for my Mother's house. She just now put the house into her Revocable Living Trust. Is my Power of Atty still good for this property? or does this cancel out my Power of Atty over this property?


Asked on 1/01/16, 2:05 pm

1 Answer from Attorneys

A power of attorney gives the person (agent) the ability to handle all things for the principal (here your mother) that she could do for herself if she was able. That means the agent basically can manage financial things - whether its stocks/money or land.

You do not have a power of attorney on a thing like a house. You just have the ability to manage the house. You as the agent do not OWN the house. The owner can do whatever they wish with their property assuming the owner of the house is mentally competent. The conveyance by the owner of property to a trust does not negate the power of attorney. Powers of attorney can only be revoked by one of the methods specified in the power (either tearing up the power or more commonly sending a certified letter to the agent advising that the power of attorney is revoked and filing a copy of the revocation with the register of deeds). So you would still be the agent under the power of attorney and free to manage any other property owned by the principal in his/her own name (not the trust) assuming the principal is unable to do so.

Your question suggests that either you do not understand trusts and financial powers of attorney When you say you "had" a power of attorney, does this mean you were just named in a document? Or were you actually using the power of attorney (you recorded it at the register of deeds and possibly at the courthouse)? If the former, it means nothing. The power of attorney can be what is called a "springing" power which only takes effect when the principal is no longer able to manage her own affairs or otherwise directs the agent to act (example - mother has knee replacement surgery and directs you to handle things while she is in rehabilation for a month or so). if the latter, I would ask why you were using the power of attorney and whether your mother is still mentally competent?

Revocable living trusts can be revised/changed of course by the grantor/settlor (person who made the trust). However, the person has to be mentally competent. So why does your mother have an agent under a power of attorney? I prepare financial and healthcare powers of attorney for my clients along with wills/trusts. But they handle their own affairs and only use the power of attorney at such time that they cannot. if a person is mentally incompetent, then they obviously should not be handling their own finances. Or their trust. In such case, the successor trustee named in the trust instrument should take over. But the trust can no longer be amended. The successor trustee generally does not have the power to amend the trust.

That said, conveying property is not amending the trust. It is just changing what is in the trust. real property, if owned when the trust was created, should have been put in the trust at that time. The idea for most of these trusts is that if you are going to spend the money creating the trust then you want to make sure as much of your assets as possible go into the trust so as to minimize/eliminate the need for probate.

Since a new deed has been prepared and recorded and the land is now owned by the revocable living trust for your mother, the trustee under the terms of the trust (and any amendments thereto) would now be responsible for managing this property. As I stated, the power of attorney is for the management of all other property/finances that is NOT owned by the trust and which is still in the name of the principal. Who is the primary and successor trustee?

If you have questions about what was or was not done, you should have the financial power of attorney, revocable living trust and deed to the property reviewed by an estates/trust attorney who practices in the county/state where the documents were created. It should be where the principal resides/owns property.

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Answered on 1/01/16, 9:01 pm


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