CHOOSING YOUR FIDUCIARIES: TRUST IS NOT ENOUGH!
https://thehistoryhacker.com/site One of the most significant challenges of estate planning is choosing the individuals who will serve as your fiduciaries to make financial decisions as week as decisions that are innately more emotional. Who do you choose to manage your affairs when you cannot?
Banyo Whether you are choosing someone to act as a medical decision maker, executor, agent under a power of attorney, guardian for your minor child or children, or someone to deal with your finances under a trust, the person you choose will have a huge impact on how your wishes are carried out. Of course, you need to choose someone you trust. Ernest Hemingway once said: â€œThe best way to find out if you can trust somebody is to trust them.â€ When dealing with such serious matters as these, throwing chance to the wind is too risky. Trust alone is not enough.
It is common for people to fill these roles by simply naming their oldest child or basing their decisions primarily on geography. It is more important to consider whether the person you choose has the skills or characteristics to do a good job. That might mean having multiple people identified for different tasks, based upon their individual strengths.
Medical Decision Maker
You appoint a medical decision maker in an Advance Medical Directive. If you are not able to make your own medical decisions, this person will make them on your behalf, including critical decisions such as:
- where you live
- who will be your health care providers
- whether to ask a doctor to enter a Do Not Resuscitate Order
- whether and how to treat any medical conditions you may have or develop
- enforcing your Living Will
This role is difficult! Â It literally can be a matter of life or death, which is a heavy responsibility. To ease that burden, it is extremely important for you to articulate your explicit wishes. You need someone who understands your general approach to healthcare and quality of life decisions. Your agent should be someone you:
- can talk to about your medical conditions, history, treatment preferences and what quality of life means to you.
- trust to act in accordance with your wishes, moral and religious beliefs. This means that you should consider their own views, particularly when it comes to entering Do Not Resuscitate Orders or enforcing your Living Will. Asking someone to act against their own morals or religious beliefs when making decisions for you puts them in a very difficult position.
- believe has the skills to act as your advocate, not only in a hospital setting, but with all your health care providers.
- believe will work well with your agent under your power of attorney and, if applicable, your trustee. Your medical decision maker will be making your personal decisions, but your financial decision maker will have to pay for those decisions. Itâ€™s important they can work well together.
- know will be able to be with you physically when difficult decisions need to be made and/or carried out.
Power of Attorney
In the event you cannot manage your financial affairs, your â€œAgentâ€ under a power of attorney is the one who will make and carry out financial decisions. It is not necessary that this person be an investment advisor or financial whiz, but you do need someone who meets these requirements:
- is responsible, pays their own bills and files taxes on time, and will do the same for you
- can deal with everyday issues such as arranging for home repairs and dealing with utility companies
- knows what they donâ€™t know and will consult with experts to make legal, tax, budget and investment decisions
- is capable of dealing with the sale of your home, if necessary, including decisions about whether and how much to remodel before sale
- is capable of dealing with government agencies and financial institutions such as banks, brokerage houses, custodians of qualified retirement accounts and pension plan administrators
- is able and willing to work with your medical decision maker
Upon your death, the executor named in your Will takes control of any assets in your probate estate.Â It is the executorâ€™s job to collect assets, pay your final bills and the costs of the administration of your estate, and then distribute the proceeds to your heirs or beneficiaries.Â If your home and contents are not held in trust, it will be the executorâ€™s job to dispose of your personal property and, if necessary, sell your real estate.
The same considerations that apply to selecting a power of attorney also apply to the selection of an executor. Additionally, you should bear in mind that the executor will have to travel to your local courthouse to be sworn in as executor and will have to report to the court, providing details of every penny that comes into and every penny that flows out of the estate for audit before closing the estate.
Executors need not be residents of Virginia to serve, but unless a Virginia resident co-qualifies with them the estate will be required to post a fidelity bond or insurance policy to protect the beneficiaries. While this is paid for from funds of the estate, not all personal representatives can qualify for a fiduciary bond, so that may be an important consideration.
Guardians for Minor Children
This may be the most difficult aspect of estate planning for any parent!Â How do you choose the best person to nurture your children and carry out your hopes and dreams for them? You are the only person who can make that choice.Â Whomever you choose, it is critical to discuss this with the potential guardian(s) so they understand the commitment they are making to you and your children. Successor guardians also should be named in your Will to avoid any delay in care for the children. The named guardians will need to be appointed and qualified by the local Circuit Court, and there will be a brief investigation into the fitness of the named guardian(s) to serve.
The job of guardian for your minor children can last many years. It presents all the challenges of parenthood, and may result in blending families, so it is important to openly discuss your expectations of the role and how you see your children fitting in with a new family.