A comprehensive estate plan consists of several documents that accomplish three important things. First, they lay out your wishes for the handling of your money and property during life and at death. Second, they explain your medical wishes if you are no longer able to make them yourself or communicate them to others. Third, they list the trusted individuals you want to carry out your financial and medical wishes.
For some people, choosing trusted decision makers is easy; for others, it may be more difficult due to tense family circumstances, geography, or the lack of living family members. While most advisors and attorneys counsel clients to choose family members or close friends, this may not always be an option. But have no fear. You can consider hiring someone if you do not have a family member or close friend to appoint to one of these important positions.
Below are some of the important decision makers you may need to select, options for whom to consider if you do not have a family member or friend who can fill the role, and questions to ask the prospective decision maker.
Executor or personal representative. This trusted individual, appointed in your last will and testament, is responsible for collecting all of your accounts and property, paying your outstanding debts, and distributing your money and property to your named heirs or trustee. This person’s task is to wind up your affairs at your death, which can be time-consuming.
Successor trustee of a revocable living trust. Serving after you, this trusted person or entity is charged with managing, investing, and distributing the money and property from your revocable living trust to you during your lifetime and to your chosen beneficiaries after your death.
Agent under a financial power of attorney. Your agent is an individual you choose to carry out financial transactions on your behalf (such as signing a check or opening a bank account). Subject to your state law, the type of authority and when the agent may act on your behalf can be specified in the financial power of attorney.
When it comes to selecting an agent to handle your financial transactions—whether at your death or during a time when you are unable to manage them yourself—there are several options available to you beyond family and friends.
When interviewing potential candidates, consider asking the following questions:
These may be the most difficult roles to fill because you are asking someone to look after your safety and welfare, as well as that of your beloved pet. Accordingly, each has unique considerations.
Agent under a medical power of attorney. This trusted individual is in charge of making or communicating your medical wishes in the event you are no longer able to make or communicate them yourself. In addition to naming someone, make sure you have completed an advance directive or living will to make your medical wishes known to the healthcare staff that could be treating you. It may also be helpful to draft a letter of instruction to your agent explaining, in your own words, the types of medical decisions you would and would not want made on your behalf. Such instructions can be extremely helpful to guide your agent when difficult decisions must be made.
If you have no trusted family member to be your medical agent, your decision may be more difficult. Because of the sensitive nature of making medical decisions for another person,
consider naming a close friend or trusted professional. It’s worth noting that state law may prevent certain professionals, such as doctors, from acting as an agent, unless an exception exists.
Caretaker for your pet. You will need to select someone to take possession of and continue caring for your beloved pet if you are no longer able to care for it due to your incapacity or death. Although the law may treat these members of your family as just personal property, if you want to ensure that your pet is taken care of, you need to thoughtfully consider who will be able to care for it.
If there is not a suitable owner among your family or friends, there are many organizations that may be willing to either take your pet or help your loved ones find a suitable forever home for it.
When interviewing potential candidates for your personal care decision makers, consider asking the following questions. Some of these questions are the same as those offered above for choosing financial care decision makers, but you will want to dig deeper when discussing them with these candidates because you are entrusting these individuals with caring for you and your pet.
Not knowing whom to appoint to these crucial roles can easily derail your estate planning process. Do not let this initial uncertainty prevent you from taking the necessary next steps to protect yourself and those you care about. Call us today so we can discuss your options to ensure that you have trusted decision makers in place to help you when needed.