A Trust and a Power of Attorney for Finances serve two separate, but complimentary functions.
A Power of Attorney for Finances appoints someone to handle your money, property and bills when you are incapacitated.
The person nominated should be someone who is good with money and responsible enough to care for your property.
The person appointed is called an "attorney-in-fact", which has nothing to do with being a lawyer.
A lawyer is an "attorney at law".
A Power of Attorney for Finances is sometimes called a Durable Power of Attorney.
"Durable" means the Power of Attorney remains valid, even if you become incapacitated.
There can also be a "power of attorney for healthcare," that is a separate document and unrelated to your finances.
Most lawyers mean a Power of Attorney for Finances when they say "power of attorney.
" If they mean the kind that is for healthcare, they generally say so.
A Living Trust can provide greater protection and easier management than relying upon a Power of Attorney alone.
Think of a Trust as being a special box into which you place your assets (bank accounts, stocks, your home, rental properties, etc.
) The person you appoint to take care of the box is called the "Trustee".
This person is NOT the "Executor".
An Executor is appointed in a Will, approved by a court, and only has authority after you die.
A Trustee generally does not need court approval, and can handle things during your lifetime "and" after your death.
This is why it is called a "living" trust.
It is customary (though not required) to name the same person as Trustee and as attorney-in-fact, so that control of both Trust and non-Trust financial matters are centralized with one person.
Even if you have a Trust, you still need a Power of Attorney because it applies, during your lifetime, to management and control of your property that is "not" in the Trust.
Certain property does not get put into your Trust during your lifetime.
For example:

• If you try to title your IRA to your trust, the IRS will treat that as an early withdrawal of the entire account.
  Your attorney-in-fact can direct IRA investments, contributions and withdrawals.
  
• If you're receiving social security, your right to benefits can only be held personally, not in a Trust.
  Once a monthly benefit is paid to you, the amount paid can be placed in your Trust, but not prior to payment.
  Your attorney-in-fact can transfer social security payments into your Trust and access your records with the Social Security Administration.
  
• Your attorney-in-fact has authority to prepare and sign your personal tax returns or speak to the I.
  R.
  S.
  about your taxes.
  Your Trustee does not.
  
• Your attorney-in-fact, but not your Trustee, can make Medicare benefits elections and enforce your rights under Medicare.
  
• If you forgot to put an asset into your Trust, your attorney-in-fact can make that transfer.
  

A good estate plan contains both of these important documents, but if you can only have one, choose the Power of Attorney.
Without it, your loved ones will need a court ordered conservator or guardian to handle your property.
This requires an expense and very public procedure.
Whether you choose both documents or one over the other, they should only be prepared with the help of a lawyer.
This will ensure that you receive the full benefit of your rights and options, while avoiding unintended consequences.