Estate Planning – Did You Choose the Right Person for the Job?
When clients are in the midst of estate planning, it is difficult to choose the individuals who will serve in the capacities as Personal Representative, Trustee, Agent, etc. There seems to be a temptation to name your spouse and then your children in birth order. That may be what seems fair, but it isn’t always the right thing to do.
It is more important to make the job duties and the skill set of the individual fit well. Being the Personal Representative, Trustee or Agent under a Power of Attorney requires the ability to handle finances and property matters. Don’t appoint an individual who has never balanced a checkbook or who is a spendthrift. If the child you appoint can’t handle his or her own money, then it is unlikely that he can handle yours.
I have observed all too often the situation where the wrong person is appointed. He doesn’t understand what he is supposed to do and reacts poorly when challenged. This can result in things either not getting done on time, or not done at all. This will affect the entire family.
While you are trying to be fair, you might be placing a child into a situation where they are doomed to fail. That isn’t fair either. Consider your child’s money management skills, temperament, and honesty.
This can be true as well for a spouse. I have had clients come in to do an estate plan because one of the parties is very ill, perhaps starting down the road to dementia. The well spouse appoints the sick one as the agent and Personal Representative. This is done so that feelings aren’t hurt; however, it is not appropriate under the circumstances.
It is important to appoint back-up agents as well. One is simply not enough. He or she could be incapacitated at the time you need the assistance. Every agent designation requires at least one, if not two, back-up individuals.
When it comes to the health care power of attorney, or Patient Advocate Designation, it again is important to match up the skill set of the individual with the job. While you want the individual to have compassion, it cannot be the individual who will be overcome with grief if you are ill. It must be an individual who can discuss your medical situation with the caregivers and give important answers and instructions. If you are worried that your spouse or a child could not make the tough call you would want made, then he or she is not the right individual for the job.
Choose wisely and carefully. Do the fair thing – match the skill set to the job.