Contributed by: Sandra Adams, CFP®
Estate planning and topics like “incapacity” or “end of life” are topics that most clients dread and often put off taking care of. Not only are these unpleasant topics to think about, but there are often difficult decisions to make in the process.
Aside from making decisions about what to leave people once you are gone and who to leave things to, some of the most critical decisions that need to be made have to do with who you name to make decisions on your behalf – most importantly during your lifetime when you might not be able to make them for yourself. This would come into play with your:
Patient Advocate/Health Care Durable Power of Attorney
General/Financial Durable Power of Attorney
Trust – listing of your Successor Trustee
For each of these, it is important to choose someone that you trust. Someone that could take over handling responsibilities and making decisions for you if you could no longer handle those for yourself, either on a temporary or permanent basis. It is important to note that the advocates for each of these roles DO NOT have to be the same person. You may decide to name a different Health Care/Patient advocate than the person you name for your General/Financial and Successor Trustee. For instance, your daughter that is a nurse may be the perfect person to name as your Patient Advocate. Likewise, your daughter that is the accountant is the perfect person to name as the General/Financial and Successor Trustee because numbers are in her blood. It is also important to remember that you should name at least one or two backup advocates, just in case your first choice is for some reason not available when the time comes. Another tip – it is not a great idea to name multiple people to serve at the same time that cannot make decisions independently. For instance, don’t name your three children to act as your Patient Advocate together – BAD IDEA – even siblings that get along likely won’t all agree when the pressure is on!
What happens when you are single and have no children or family (and maybe no close friends younger than you) to name as your advocate? Surprisingly, this comes up quite often and this makes it hard to find an appropriate advocate. Try naming professional advocates. Here are some possibilities:
Often, attorneys are willing to serve as General/Financial Powers of Attorney
Health Care Professionals like Geriatric Care Managers that will serve as Patient Advocates. There is likely to be an hourly cost for their services, but these folks are well qualified and will serve and the proper fiduciaries when the time comes.
For successor trustees, attorneys or Financial Institution/Broker-Dealer Trust Departments can be named as success trustees or co-successor trustees (also for a cost) to make sure the trust document is followed and the client is protected.
These advocate decisions, especially those that apply to possible lifetime incapacity, are some of the most important estate planning decisions you will make. As much as you don’t want to make them, it is important that you do. We encourage you to consult with your financial planner and estate planning attorney on these and other important estate planning decisions. Don’t put off today making these important decisions that could impact your financial plan!
Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.
