Getting object as a result from func/proc in Delphi

What is the best practice for returning simple objects from functions / procedures in delphi?

eg. 2 kinds of code:

pass created object as reference, populate object in Proc, destroy it afterwards

procedure Proc(var Obj: TMyObject);
begin
  // populate Obj
end;

O := TMyObject.Create;
try
  Proc(O);
  // manipulate populated object
finally
  O.Free;
end;

or get created object as result from function, destroy after manipulation

function Func: TMyObj;
begin
  Result := TMyObj.Create;
end;

O := Func;
if O <> nil then
begin
  try
    // manipulate
  finally
    O.Free;
  end;
end;