Planning without Offending

     Occasionally a client will choose to name all of their children as administrators of their estate plan by placing different children in charge of different aspects of the plan. That can become a problem if children do not have the skill or ability to properly act as an administrator or have certain moral values that will prevent them from making a decision, for example a “pull the plug” decision under a Patient Advocated Designation. Another problem may arise when the client names all of their children to share in the administration duties equally, for example as co-trustees. While occasionally multiple co-trustees can better facilitate achieving the client's goals, a more common occurrence is the inability of those co-trustees to agree on actions, thus delaying the administration of the trust. An even number acting in any capacity has the possibility of creating a deadlock on decisions.

      We never tell the client they cannot do something with their estate plan. Instead, we inform the client of the potential consequences of their actions and attempt to find a solution that alleviates the client's concerns and achieves the estate plan's goals. Frequently that solution involves naming different children to different positions, where their real life experience is most advantageous. For example, a child with experience in the medical profession will serve as Patient Advocate, while a child with business management experience serves as the representative under a Durable Power of Attorney. Alternately, naming multiple, but not all of the children, to act together in a role allows the client to involve their family members without creating an administration scheme that is so complex it derails the whole process. Occasionally clients will name an independent party to cast a deciding vote only if the children are unable to agree on a course of action.

      Avoiding offending any of their children becomes more complex when a child with personal issues such as substance abuse problems or financial problems can benefit from having a strong trustee to oversee distributions, but the client wishes to avoid overtly treating their children differently. In these cases, we can use a combination of distribution provisions and/or an objective third-party co-trustee to achieve this goal and avoid hurt feelings. For example, the provisions of a Trust can name a trusted family friend as co-trustee with each child over that child's share of the Trust. The Trust then provides the co-trustee with the authority to make outright distributions at the co-trustee's sole discretion, allowing the co-trustee to distribute assets to children who do not have personal issues while allowing that co-trustee to retain assets in trust for the other child while working with them to overcome their life challenges before making distributions.

     Ultimately, the decision of who to name in an estate plan falls to the client and occasionally we find that it helps to remind people that by the time anyone may be offended with their actions they will no longer be around to listen to the complaints.

        On Thursday, we will discuss the often difficult decision of naming guardians for minor children, and how to avoid offending family members who are not named in this role.

Matt Ferrara