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It Is Ok To Chose Someone Other Than Child As Agent
Jan L. Warner and Jan Collins

Question: After reading your column for several years, my wife and I began the planning process a year ago, but we’ve yet to sign any papers because we can’t agree on who should handle our affairs should we become unable to do so. We are in our late 60’s, and have three grown children and four grandchildren. Here’s the rub: Our oldest son has been divorced twice, has remarried again, is supporting four children, and has continuing financial problems; our older daughter is involved in a relationship with a person we neither like nor trust; and our younger daughter is a Ph.D. who has difficulty deciding to come in out of the rain.

Although I love my children, I don’t trust any of them to handle my business. My wife, on the other hand, believes that family members should make family decisions, and wants us to appoint all three even though none lives within 500 miles of us. This has caused an on-going argument. We are not wealthy -- our total assets (including our home) approach $400,000. We have long-term care insurance, and our household income is $37,000, including Social Security. We are both rather headstrong, but finally agreed that since you “caused” us to begin this year of misery, we will call on you to be the “tie-breaker” and will follow your advice.

Answer: While no parent wants to hurt the feelings of children by not appointing them to a position of trust, guilt feelings must give way to good, old common sense. In choosing a person to act as a fiduciary for you – including an agent, a trustee, or a personal representative, you must trust that the individual can and will “carry the mail.” Since history is the best predictor of the future, you should make this decision objectively with your heads, not your hearts.

That said, if you are like most folks who have been married a long time, the first choice for each of you would be the other – assuming that, at the appointed time, the other is alive and has capacity to act. The problem here is choosing alternates as part of a back-up plan should either of you not be able to act for the other.

While some appoint co-trustees, we don’t like this option because, if there are disputes, the local probate judge will decide who serves, often at great – yet avoidable -- cost to the estate and to what is left of family relationships. One option could be to appoint one child as fiduciary and the other two “special” fiduciaries who would have to consent to specified activities, such as making gifts. But again, should there be disagreements, litigation may result.

Due to the potential liability associated with fiduciary responsibility, it is unlikely that professionals will act but, if they do, they will probably charge significant fees. Lawyers generally should not serve in this role due to potential conflicts of interest. With your comparatively small estate, trust departments of large banks either will not take this on or will charge fees that will make this route financially impractical.

So, where can you turn? If you live in a place where probate courts have lists of individuals who act as court-appointed guardians or conservators, you may look there. In addition, with the downsizing of banks, you may find a retired banker or trust officer. Because of conflicts of interest, don’t choose financial planners or brokers who would also be investing your funds. And there may be small community banks with trust departments that will fit the bill. We suggest that you check with an experienced lawyer in your area to see what options are available.

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