Last month, I wrote a column stating that every adult needs at least three estate planning documents: a power of attorney for health care, one for finances, and a basic will. Many of you reached out to me with specific concerns, so I’m revisiting the topic with a few tips on choosing individuals to serve in the important roles of your estate plan.
Of course, summing it all up isn’t easy to do, as every situation is different, so I consulted a few experts on the topic who deal with these matters on a regular basis.
“There are some guidelines that I think are important, but every situation must be analyzed and assessed based on the facts applicable to the client,” says Robert G. Aitkens, who operates Atlanta-based Aitkens & Aitkens, P.C. with his partner and wife, Terri T. Aitkens. Before making decisions about whom to name in your estate planning documents, spend time honestly assessing your family structure, your family dynamics and your assets, he says.
One thing is for sure. “The most important qualities that the named executor, trustee, power of attorney holder or medical agent must possess are honesty and trustworthiness. Somebody who cares about you and your family,” Aitkens says. Start with those basics, then consider these other important factors:
You don't have to settle on one person. For almost any aspect of estate planning, you don't have to settle on a single individual. For example, when considering a trustee for a trust, "You can name one person, two or more persons to act together, a corporation or trust company to act alone or a bank to serve as co-trustee with an individual," says Beth Wood of North Carolina-based firm Moore & Van Allen and vice chair of the Emotional and Psychological Issues in Estate Planning Committee created by the American Bar Association's Section on Real Property and Trusts and Estates. The same goes for power of attorney holders. "You don't have to name one person … and if you name multiple people, you could allow them to act jointly or severally, dependent upon who is available and willing to act," Wood says.
Financial acumen or health knowledge is helpful, but not required. If you have a trusted friend or family member who happens to be a physician or who is financially savvy, great, but these are not requisites for giving someone power of attorney for your health or finances. "If (the person) is honest and intelligent, they can seek professional counsel in certain financial, accounting, tax and medical areas," Aitkens says. "It is a step for a lot of people to seek independent professional counsel, but it often is the difference between making the right or the wrong decision."
Consider the individual's availability and age. Always think about the ages of the people you appoint to various roles. Will they be around for many years or will you need to update documents often? In addition, consider availability. "Administering an estate can be an extremely time-consuming endeavor. If you name someone who lives in California, doing everything they need to do in Georgia can be burdensome," Wood says. In the case of naming a guardian for a minor child, consider where that person lives and if he or she would have to move in order to properly care for your child or children.
Communicate openly with everyone involved. These are not decisions you need to make in isolation. Both Aitkens and Wood suggest talking to the individuals you are considering before making a decision. Some of them may not be comfortable taking on certain roles. Some may help you come up with solutions if you are unable to make a choice. Communicating early and openly with all parties involved and executing documents that include your actual intentions will allow you to have the right people in place to take care of you during your lifetime … and your loved ones after your death, Wood says.
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