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A power of attorney is a legal document that gives one person (the attorney) the right to act on behalf of another (the principal) in certain situations. A trust is a legal arrangement wherein some person (the trustee) is designated to manage the property of another (the grantor or settlor) for the benefit of a third party (the beneficiary).
A power of attorney is a legal document that allows one person to act for another person, but the authority comes with duties and responsibilities. The giver of the authority is known as the principal, while the receiver is referred to as an agent. The agent has both a legal duty to the principal and the duties granted by the power of attorney document. Once a principal selects an agent, she completes a legal power of attorney document. The document names the principal, the agent and all powers the agent receives. Any specific limits placed on the agent's power are listed on the document, as well as any alternate agents -- used if the first agent is unable to act -- and sometimes a termination date.