Having your estate planning documents created by an experienced professional is essential, as is naming the people who will be putting your plan into action. A key sticking point is often deciding who is the right person for the role, says an article from Nasdaq titled “Estate Planning: 5 Tips to Pick Trustees, Executors, and POAs.” It helps to stop thinking about how people will feel if they are not selected and focus on their critical thinking and decision-making abilities.
Consider who will have the time to help. Having adult children who are highly successful in their professions is terrific. However, if they are swamped running a business, leading an organization, etc., will their busy schedules allow the flexibility to help? A daughter with twins may love you to the moon and back. However, will she be able to handle the tasks of estate administration?
Take these appointments seriously. Selecting someone on an arbitrary basis is asking for trouble. Just because one child is older doesn’t necessarily mean they can manage your estate. Making a decision based on gender can be equally flawed. Naming agents and executors with financial understanding is more important than giving your creative child a chance to learn how to manage money through your estate.
Don’t make the process more complicated. There are many families where parents name all the siblings to act on their behalf so no one feels left out. This usually turns into an estate disaster. An odd number of siblings can lead to one group winning decisions by sheer numbers, while aggressive, win-at-all-costs siblings—even if it’s just two—can lead to delayed decisions and family divisions.
Name the right person for right now. Younger people who don’t yet have children often aren’t sure who their best agent might be. Picking a parent may become problematic if the parent becomes sick or dies. Naming a close friend in your thirties may need updating if your friendship wanes. Make it simple: appoint the best person for today, with the caveat of updating your agents and documents as time goes on and circumstances change. Remember, circumstances constantly change.
Consider the value of a professional trustee or fiduciary. The best person to be a trustee, executor, or power of attorney may not always be a family member or friend. The relationship could suffer if a trustee is one sibling and the trust beneficiary is another sibling who can’t manage money. A professional may be better suited to deal with management and tax issues if a large estate includes generational trusts and complex ownership structures.
The value of having an estate plan cannot be overstated. However, the importance of who will be appointed to oversee and administer the estate is equally important. The success of an estate plan often rests on the people assigned to handle their respective tasks.
Be candid when speaking with an experienced estate planning attorney about the people in your life and their abilities to manage the roles.
Reference: Nasdaq (Sep. 4, 2022) “Estate Planning: 5 Tips to Pick Trustees, Executors, and POAs”