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Category: Contracts

What is the difference between a Power of Attorney and a Durable Power of Attorney?

The power or powers granted to an Agent or Attorney-in-Fact in a Power of Attorney ceases to exist upon the incapacitation, unconsciousness, the grantor becomes non compos mentis, or upon the grantor’s revocation of the power. Notice must be given to the Agent or Attorney-in-Fact while the grantor is compos mentis in writing.

The power or powers granted to an Agent of Attorney-in-Fact by a Durable Power of Attorney continue(s) to remain in force even after the grantor of the power(s) becomes incapacitated  or until the death of the granter of the power(s),even if the grantor is incapacitated, unconscious, or non compos mentis, unless revoked in writing with notice to the Agent or Attorney-in-Fact.

The important thing to remember is that all Powers of Attorney and Durable Powers of Attorney cease upon the death of the grantor of the powers.

This information is …

What is the difference between a “Living Trust” (Revocable Trust) and an Irrevocable RemainderTrust?

Any property deeded into a Living Trust does not leave the estate of the Trustee, because he maintains, according to the IRS, an “incident of ownership,” i.e., he can deed any of the property in the trust out of the trust at any time during his lifetime. Thus he still maintains an “incident (actual form) of ownership” in the property. Therefore, the property in a Living Trust never ” leaves the estate” of the Trustee and remains part of the “value” of the Trustee’s estate for Inheritance Tax purposes.

On the other hand, an Irrevocable Remainder Trust has the advantage of the property deeded into the trust actually “leaving the estate of the Trustee,” i.e., no longer remains part of the value of the Trustee’s estate for Inheritance Tax purposes, if, according to IRS rules, the Trustee lives for three years …

What is required for a valid legal contract?

For a valid legal contract, three elements are required.  If any element be missing, a contract does not exist.

1.  Offer

2.  Acceptance

3.  Legally Binding Consideration (Bargained for Exchange, e.g., payment in exchange for services or goods).