Is a durable power of attorney better than using a revocable living trust?
A durable power of attorney allows you (the "principal") to name someone (i.e., your "agent") to manage your assets. This can be especially helpful if you become incapacitated and want to avoid having a conservator appointed.
In fact, most comprehensive estate plans prepared by lawyers include a durable power of attorney. Durable powers of attorney, however, have some disadvantages that revocable living trusts do not have.
A durable power of attorney does not avoid probate at the time of death.
Agents under a durable power of attorney generally have fewer obligations than trustees of a trust, and are tasked with only typical fiduciary obligations. The agent under a power of attorney is also not required to act on your behalf.
Agents under a durable power of attorney are not required to keep beneficiaries reasonably informed, unless demanded by the principal or by court order. In contrast, a trustee of a trust has an obligation to keep beneficiaries reasonably informed of the trust and its administration.
Acceptance by Financial Institutions
One practical downside of durable powers of attorney is that financial institutions are often reluctant to accept the document. Sometimes banks and other institutions have internal policies requiring their own forms be used. Assets titled in the name of a trust, on the other hand, typically do not have this problem as financial institution usually feel more confident in relying on trust documents.