Our firm never says that estate planning is easy, the degree of intellectual rigor and self-reflection is often misunderstood by those who are doing it their first time. There are several “decision makers” in an estate plan. These are people who will fill various roles in the event of the incapacity of the planners (hereinafter, “Principals”) or at their passing. In a typical estate plan, the principals will need to decide who their first choice is for these roles and usually a second or third in case their first choice is unable or unwilling to take the role. The following roles will typically need to be filled:
- Successor Trustee – Person who will take over as Trustee and either manage the trust assets or distribute them when you have passed.
- Personal Representative – Person who is responsible for the safeguarding and distribution of all non-trust assets after you have died.
- Health Care Agent- Person who is authorized to make medical decisions for you in the event you are incapable of doing so.
- Financial Power of Attorney- Person who is able to access, manage, and otherwise do what you could do with your financial assets.
- Successor Guardian- Person who you nominate to replace you as a parent of any minor children in the event that you are no longer able to do so.
These are big decisions often times these are the hardest decisions of the principals. Some Principals are fortunate enough to have many choices including family and friends that not only do they trust but who are also competent to fill these roles. Other clients, I have helped have recently moved here and one of their biggest fears is that when they pass they will not be discovered for a month because they do not have regular social engagement and no one would even think to check on them. Still, others have recently moved here and all their family and friends are in a different state.
One of the hardest positions to fill is that of a successor guardian of minor children. When our clients have to make a decision on who should raise their kids if they are unable to, there is often a long moment of silence while the client mentally thinks of the available candidates and one by one crosses them off. There are so many considerations, geographical locations, the current size of the candidate’s family, parenting style, financial ability to pay for additional costs, etc. Not only does the principal typically have to wrestle with their own high standard for replacement parent qualifications, but they also have to reconcile them with that of their spouse.
The difficulty of these decisions perhaps is a contributing reason why many people wait until they are empty nesters before getting an estate plan. The irony in this thinking is overwhelming, shouldn’t those who have the biggest reason to make an estate plan create one before those with lesser reasons to do so? I couldn’t count how many times I have heard young couples with children say to me, “we don’t need any estate planning we don’t have anything to plan for”. I just think to myself, there is a greater need for public education regarding what estate planning actually is. In a former article, “Your Kids Might be Headed for Foster Care and You Don’t Even Know it” I discussed what happens to children whose parents who suddenly pass that have neglected to plan.
The question of who to select as a successor guardian is probably the toughest one, but your selection who will be your successor trustee, health care agent, and financial power of attorney can be very difficult as well especially if you have a contentious family. Who will be the best at keeping the peace while at the same time can handle the scrutiny of other family members and carry out your wishes. Who is organized enough to jump through the hoops it takes to wind up an estate? Who can spare the time? Family dynamics are fascinating to me. There are certain times when family dynamics are more evident than others. The distribution of an estate is certainly one of them. Parents/Principals have to wrestle with these dynamics as well as the practical considerations of location and availability as well.
Here at the firm we can guide you through this process, and give examples of what others have done. We may even be able to create something new that fits your family dynamics better, but the hardest part of estate planning—the decision discussed above is ultimately up to you.