When it comes to creating your estate plan, how do you decide who to name as fiduciaries? How do you determine how to dispose of assets when you have favorite relatives? These are common issues that typically arise in situations with unmarried individuals who may or may not have children.
When naming agents, there are many factors to balance and consider. For example, you may not want to name a child who lives across the country as your health care agent and instead appoint a child who lives closer and can more easily accompany you to medical appointments and communicate with medical providers without having to worry about any time difference. If a child has a medical background, you may also want to appoint them as agent given their experience.
Similarly, when considering who to name as attorney in fact to handle financial assets, you will want to consider the location of your agent but, more importantly, appoint someone who is financially savvy with their own funds and not a spendthrift.
These are factors to consider when naming your personal representative and trustees as well.
Having discussions with your children (or other family members) about why you have chosen your agents can be difficult. However, what is most important is that you name fiduciaries who can make the best decisions on your behalf and on behalf of your beneficiaries after your death.
Dispositive provisions in your estate plan can be even more difficult to navigate. You may have a favorite child or favorite grandchild you would like to benefit more than other members of your family. Failure to treat your children (or grandchildren) equally in your estate plan can easily cause resentment. One way to minimize this is to speak with your relatives and explain why you are structuring your estate plan in such a manner. Keep in mind that your estate planning attorney is there to assist you through all aspects of the estate planning process. If you are concerned about how your family members may react to such a conversation, involve your attorney and allow them to act as a mediator. It is often better for family members to know what to expect on your passing than to be kept in the dark and find out when it is too late to ask questions. Alternatively, if you decide that you do not want to have a conversation, you may leave a separate writing that can be kept with your Will explaining your intentions. Again, your estate planning attorney can work with you to best capture your intentions in writing.
In certain circumstances, you may wish to benefit one relative over another for financial reasons (for example, if one child is an investment advisor and the other works at a nonprofit receiving significantly less compensation). In other circumstances, your desire to leave a larger bequest to a family member may have nothing to do with their income and, in fact, may be because they are your “favorite.” Further, you may not be concerned with how your family members react to any unequal treatment because you will be dead. However, sometimes – for family harmony – it is better to treat everyone equally despite any underlying feelings.
There is no right or wrong answer when it comes to making these types of decisions. In reality, navigating family dynamics in estate planning can be complex and stressful. It is best to consult an experienced attorney when addressing these issues and having these conversations.