19 Feb Suze Orman said this about trusts. Is she correct?

Q. One of Suze Orman’s PBS fundraising programs makes mention of the need for a trust in addition to a will in the event of a person being incapacitated and not being able to execute financial documents. She said trusts address this issue. She goes on to say that wills are only in effect in the event of a death and not otherwise. She also gives the example of having to sell a house owned by a couple, but one person is not able to sign/execute documents to do so and only a trust will address this. Is she correct and if so would you need a trust to resolve this potential situation or is there another way?
— Unsure

A. We know Suze Orman is popular in some circles.

We didn’t hear her comments, but let’s just say this:

General financial planning principles are one thing. Estate planning is another. The complexities that come into play when you consider the specifics of a person’s situation — and the importance of state law — don’t always play well on television. Short snippets may give viewers tidbits of accurate information, but if an issue is only skirted over, it’s easy for a viewer to get the wrong idea, or even walk away with incorrect information.

That said, here’s what you should know.

Orman is correct that assets in a trust can be handled by a trustee during lifetime and that wills dispose of assets upon death, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.

However, surrogate management of assets can also be accomplished by the execution of a general durable power or attorney and a health care proxy, she said.

A general durable power of attorney is a document in which a person, called the principal, appoints an attorney-in-fact, also known as an agent, to engage in financial transactions on behalf of the principal even if the principal is incapacitated, Whitenack said.

A health care proxy deals with the appointment of an agent to make medical decisions for the person in the event they are unable to make such decisions themselves.

“In the reader’s example, if a person appoints his or her spouse as an agent in a general durable power of attorney and subsequently becomes incapacitated, the appointed spouse could sell the house on behalf of the couple,” she said. “Trusts are generally more complicated and expensive documents and may not be suitable or necessary for many individuals, whereas most people should execute wills.”

So where does this leave you?

We always recommend you meet with an estate planning attorney who can look at the specifics of your situation before suggesting which documents you need to make sure your wishes are followed.

Email your questions to .

This story was originally published in February 2024.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.