November 2022
The decisions on who would be best to carry out your wishes aren’t always clear-cut, and it’s easy to make a mistake. So, before you name the agents for your estate planning documents, take these five tips into consideration.
Making sure that your estate planning documents are implemented as early as possible is extremely important. One of the biggest challenges that clients encounter during the process is deciding who to appoint as their trustees, powers of attorney, health care surrogates and executors.
Below are some practical tips.
- Give preference to those who have the most time to devote and live nearby
Many parents have very accomplished successful children. They, many times, have tight schedules, giving them less time to devote to helping. Some have more family responsibilities (young children). It is easier for people who are closer in proximity to you in terms of being your power of attorney and health care surrogate. Being nearby matters less for trustees and executors.
- Do not make arbitrary designations:
Selecting an individual based on arbitrary characteristics. Like appointing a particular child because they are the oldest. Or based on gender.
- Avoid naming multiple agents:
Parents want to make sure none of their children feels left out, so they want to appoint all their children to every position possible. This leads to deadlock or discourse once decisive action is necessary.
- Pick the best agent for today:
If you are appointing an agent who is older, maybe that person dies or becomes incapable of acting when you need them. If you appoint a friend, maybe that person isn’t a friend in the future.
Appoint the best person for today. You can always make changes as your life evolves.
- Consider a professional trustee or fiduciary under certain circumstances:
In some situations, appointing a professional or institution as a trustee is best. If you have a beneficiary whose share of your estate must be held in further trust so they are not getting their inheritance all at once, you should consider the above. Otherwise, discretionary distributions may be left up to family members, this could create an adversarial relationship between them.
If you are of substantial wealth or have generational trusts, professionals and institutions are better suited to deal with those issues.
The estate planning vehicles themselves are important to have. The documents and plan are only as good as the agent(s) you appoint. The agents are the real drivers of whether a plan is successful.
Use the tips above to help guide you, speak to a professional estate planning attorney and get their help on your specific situation.