When creating an estate plan, there are many things to consider, but the people you choose as agents are probably the most important. These people will have the power to make decisions that could impact you and your beneficiaries, so you want to make sure they are the right people for the job.
What is an agent?
An agent, by definition, is someone who acts with authority on your behalf. In the estate planning context, agents can include the will executors, personal representatives, guardians, attorneys in fact in a power of attorney and health care agents, to name a few.
In the context of an advance medical directive, for instance, the healthcare proxy oversees medical care decisions on your behalf if you lose the capacity to make or communicate these decisions yourself. Whether you want life-extending treatment in the instance of incapacity is one of the most important decisions you can make. In an advance healthcare directive, you choose someone to communicate that decision for you. Because of the magnitude of this role, the person you choose should be someone you trust.
The same is true for financial agents and will executors: It is critical to make sure you assign and authorize people you trust.
How to choose
There are three key principles to consider when assigning agents as part of your estate plan:
- Is this person trustworthy? There are many people we love who we would want to give the honor of naming them an agency role in our estate plan, but they are simply not trustworthy. Further, it is important to assign someone who you trust, but who other people involve will trust too. If you are the only one who trusts this person, the situation will be ripe for conflicts and lawsuits in probate.
- Does this person handle finances well? Even people you trust might not handle finances well. You should ask yourself if the person has ever had debt problems, gambling problems, issues with managing their own finances, or other significant money issues.
- Is this person compromised? This item might relate to the previous item, but it is important to consider if the person you could name as a fiduciary is potentially compromised in the ability to fulfill the duties. If the person has debt problems, significant relationships with anyone you would consider an enemy or other problems, you should think twice before assigning that person. Even significant ideological differences could compromise the person. If a person is deeply dedicated to never extending life after incapacity, but your wishes are to stay alive at all costs, there’s a conflict of interest that could compromise his or her ability to fulfill the role.
There are professional fiduciaries available, as well. If you can’t find in your existing relationships you trust enough for this type of role, that is something to consider.