When working with a couple, it is always important to determine the needs, goals and intentions of each spouse. Important matters to consider would include: (i) are assets held jointly or separately? (ii) are there children from prior relationships? (iii) do spouses have differing goals and/or plans? There are frequently times when the circumstances and goals of a couple are aligned in a fashion that would lend itself to very joint and unified planning including perhaps a joint trust. In other situations, the benefit and need of separate planning is crucial and ultimately will result in an estate plan that suits both spouses better. There are no cookie-cutters when it comes to estate planning and helping clients best address the unique circumstances and goals of their lives. Planning for couples requires thoughtful consideration and careful analysis of each situation.
A general durable power of attorney grants a named individual (called the “attorney-in-fact” or “agent”) the authority to act on your behalf with respect to whatever matters are designated in the document. In other words, it is the process of naming someone to act for you if you are mentally unable to. This is usually prepared in anticipation of the possibility of someday being mentally incapacitated and unable to manage your own personal, financial, legal and/or business affairs. In the event that you have not prepared this type of document—and you then become mentally incapacitated—there would be some significant legal and practical challenges. In such an event, someone would have to seek the appropriate determination through a court process to be granted authority to make these types of decisions. This court process (called conservatorship) is costly and time-consuming. Furthermore, not having a document in place that you have prepared leaves greater ambiguity about who you want in that role and what limitations or specific directions you want to include with that authority. Given that preparing a power of attorney is fairly easy and is not very expensive, it is a very wise and simple way to accomplish important planning for your life and your family.
When preparing a Will, Trust or Power of Attorney, choosing who to name in different roles of control and decision making is undoubtedly a central priority. Who should I name to handle my affairs? Who do I trust? Who do I want in control? Who do I want making investment decisions? Similarly, the questions is often raised, “Should I name the same person in various roles?” While there is substantial differences among the different roles established by various types of estate planning documents, there remains a constant important consideration of naming the “right” person. Under a Will, the “personal representative” will be in charge of handling a probate estate. Under a trust, the “trustee” will likely be charged with handling investments or other property and may have some discretion in distributions to beneficiaries. Under a power of attorney, the “agent” or “attorney-in-fact” will often have wide-ranging authority to make decisions on your behalf. Naming the same person for each role can sometimes make good sense—other times it can be problematic. Understanding the details of each role is critical to selecting the right person to fill that role.