Appointing Someone for Your Financial Decisions

No one likes to think about the prospect of being unable to make important decisions for themselves. Yet the unfortunate reality is that many people find themselves in a position in which they are unable to make those decisions, including financial ones. Often the need for someone to help with financial decisions and transactions arises due to mental decline, including Alzheimer’s or other dementia. But it is not only the elderly who may need help managing their finances.

Even younger people may become unable to manage their own affairs due to sudden illness or injury. If they have not arranged for someone else to have the legal authority to step into their shoes, the result can be a financial catastrophe.

If you become unable to manage your financial matters, and you have not appointed someone to help you, your family may need to petition the probate court for a guardianship and conservatorship. If the court agrees that you need someone to manage your financial decisions and transactions, it will appoint someone, often a family member. That person may not be the one you would have chosen to take control of your major decisions and ultimately your life. Similarly, if you do not name someone in your estate plan to administer your estate after you die, the court may select a personal representative other than the one you may have wanted.

The only way to ensure that you approve of the person who could ultimately be in charge of making financial decisions on your behalf is to appoint them yourself. You can do this by creating a durable financial power of attorney and/or a living trust that names that person as a successor trustee.

It is not difficult to put these measures in place, but people often struggle to appoint an agent, executor, or trustee because of perceived barriers to the outcome they want. Let’s discuss why people put off appointing someone to make financial decisions.

Why People Put Off Appointing Someone to Make Financial Decisions

There are a number of concerns that prevent people from moving forward with completing their estate plan. Often, people are unaware that those concerns can be easily addressed and resolved. Rather than speaking with an estate planning attorney who can explore options with them, they keep putting off the task. But when clients finally make it into the office to discuss their needs, their relief at learning there is a solution is palpable.

Here are some of the concerns we have heard from our clients and some of the solutions they didn’t realize were available to them.

“I don’t want to offend one of my children by choosing the other as my executor.”

This is a common one. Older clients with multiple adult children are often hesitant to appoint one child to a position of trust, such as agent under a power of attorney, trustee, or executor. The fear is that the other children might feel snubbed and resentful and that it could even create a rift between the siblings.

The good news is that you can appoint more than one agent under a durable power of attorney, and you can name co-trustees or co-executors. To avoid conflict, it is best to choose people who can work well together and to make sure you are specific about the duties of each so your wishes are carried out the way you want.

If you prefer to appoint only one agent or trustee or executor, you can do that while still naming the others as alternates in case the primary decision-maker is unable (or unwilling) to serve in that role. That will help to avoid the perception that you trust one family member more than the others.

“I don’t mind my daughter helping me with my finances, but I need someone more financially savvy to manage my trust and estate when I’m gone.”

Sometimes it makes sense to have a nearby family member act as an agent under a financial power of attorney to help you with routine financial matters. But administering an estate or trust can be complex or overwhelming, and you may be worried it will be too much for your family member. Many people do not realize they can have an entity, such as a trust department at their local bank, act in that capacity. Alternatively, we can arrange matters so that a family member acting as trustee or executor has the help of a professional entity. We also offer probate and trust administration services through our office.

“I would like my son to serve as my executor, but I would feel more comfortable if there was some oversight of the process.”

People are often more comfortable appointing a family member to a position of trust if they know there are “guardrails” helping to keep financial or estate matters on track. We can arrange for there to be periodic accountings so that there will be transparency and to provide the fiduciary with the support they need to carry out their obligations.

“I’m worried that my family doesn’t have the background they need to manage my financial affairs or estate.”

Your agent, trustee, or executor doesn’t have to have a financial background to successfully do what you or your estate needs. As long as they are trustworthy and willing to serve, they can learn what they need to know or engage professional help. Our law firm can connect them with financial advisors, CPAs, real estate agents, and more.

Legal Solutions for Agents, Personal Representatives, and Trustees

Choosing someone to make financial decisions on your behalf can be daunting, but it doesn’t have to be. The first step is enlisting the help of an experienced estate planning attorney.

If you have been hesitating to appoint someone to help with your financial decisions or those of your trust or estate, we invite you to contact our office to schedule a consultation and take the first step toward peace of mind.