In addition to a Will, a comprehensive Estate Plan should include three (3) other, very important documents:
1. A Financial Power of Attorney that grants broad powers to a designated “Agent” to handle financial and other matters pertaining to real estate, investments, retirement assets, and other personal property;
2. A Medical Power of Attorney granting authority to your Agent to make medical and other healthcare decisions that are not end of life medical decisions, and to have access to medical and healthcare records and information when needed; and,
3. A Living Will appointing an Agent to oversee advance directives pertaining to healthcare at the end of life.
Most clients appoint a spouse or trusted friends to serve as their Power of Attorney Agents. It is the choice of Alternate Agents that is often more difficult. As a result, when consulting estate planning clients about Financial and Medical Powers of Attorney, we are often asked:
“Who should I choose as my Agent and Alternate Agent to handle my financial and medical issues when I can’t handle them myself?”
Some Important Considerations. In addressing this question, we emphasize that the choice of family members or other individuals as Agents to make financial or medical decisions should be made after careful consideration of a number of factors. These factors include:
The Trustworthiness of the individuals to be appointed;
The need for familiarity with ordinary financial matters and the ability to work with financial and investment advisors, banks, and other financial institutions;
The ability to understand the advice of doctors and other medical professionals;
The importance in choosing individuals who will treat you and others with respect and dignity when serving as financial or medical Agent;
Avoiding appointment of self-serving individuals inclined to take control of matters without consideration of your expectations, best interests, and needs; and,
The importance of continuing involvement and interaction with the individual on whose behalf the Agent is overseeing financial and medical matters, for as long as they are capable of some understanding and input into decisions and transactions. Choosing individuals who will do this is of paramount importance.
Factors when Appointing Children. Many clients are concerned that appointment of one of their children as a Power of Attorney Agent or alternate Agent will cause conflict and tensions in their family and among their children. Unfortunately, we have observed this play out in families where resentment and jealousy are part of the family dynamics. When confronted with questions about this issue, we advise clients to discuss with their children the possible appointment of one or more of them as Agent or Alternate Agent. If through those discussions there is acceptance and consensus as to who best should serve in the various roles, then the choices are relatively simple. However, if the discussions result in disagreement and resentment, or a sense of favoritism among the children in those cases we advise our clients to consider appointment of trusted individuals outside of their immediate family, such as a sibling or friend to serve as Agent over medical and financial matters.
Trust Your Experience and Instincts When Choosing Agents. Discussions with clients about the choice and appointment of Power of Attorney Agents are among the more enlightening aspects of our law practice and decades of experience drafting Medical and Financial Power of Attorney documents. Through those discussions and our observations working with appointed Agents handling our clients’ affairs on their behalf, we have observed that the choice of Power of Attorney Agents is best made after consideration of many factors, including those in this Blog. Perhaps most instructive is the observation that our clients’ experiences within their immediate and extended families, among their friends, and with trusted advisors are often the best measures as to who our clients trust to handle their financial and medical matters. In the end, based on those experiences and the dynamics within those relationships, instincts or “gut feelings” about who will work for you, in your best interest, mindful or your expectations, and addressing all of your needs are another significant factor in choosing who will best serve on your behalf in these important roles.