Over the past twenty-five years, I have drafted thousands of last wills, financial powers of attorney, and advanced health care directives. If I do say so myself, I have done a fairly excellent job in drafting these documents. Ensure that you have these documents and that the documents are well-drafted is especially important. Not all estate planning documents are the same. For instance, all financial powers of attorney are not the same, and some of these documents fail to address critical issues.
It is difficult to explain what a well-drafted power of attorney is in a short article because there is a myriad of issues that can arise in a person’s life and each of these issues should be adequately addressed in the power of attorney document. If I were to summarize what a well-drafted power of attorney is, I would say it has to be comprehensive.
If you retain the services of a certified elder law attorney, of which there are only about sixty in the entire state of New Jersey, you can feel fairly confident that your estate planning documents will be well-drafted. But one issue that I wanted to address here is something that every client should be thinking about before they meet with their attorney. Which of their children will they name to each of the decision-making roles—executor, financial power of attorney agent, health care agent.
Let us assume that Mr. Smith is going to his attorney to have these documents drafted. Mr. Smith is a widower. Mr. Smith has four children. Mr. Smith wants to treat each of his children equally in his Will, meaning each child will receive one-quarter of his estate upon his death. He does not want to show favoritism in anything he does through his estate planning documents.
If Mr. Smith consulted with me, the first thing I would tell him is that he should chose one of his children for each of these roles, not all of his children and not even two of his children. In other words, I recommend one child serving as executor at a time, not co-executors and certainly not all four of Mr. Smith’s children.
Many clients come to me and want to name more than one child to each of these roles. The client believes that by naming more than one child to each of these roles he is not showing favoritism. The problem is, by naming more than child, Mr. Smith is compromising the fundamental integrity of his estate planning documents.
With respect to health care directives, the law does not permit the naming of co-agents or multiple agents. Mr. Smith can only name one child to serve in the role of his health care agent. Mr. Smith can name, and should name, successor agents, but he cannot name two or more of his children to serve in the role of his health care agent at the same time. Mr. Smith should name one child as his primary agent and another child as a successor agent to serve in the event that his primary agent is unavailable or unable to serve.
With financial powers of attorney, the law does permit Mr. Smith to name co-agents or even multiple agents to serve at the same time, but I recommend against it. No client has ever called me to tell me that a bank refused to honor his power of attorney because it named a sole agent, but I have had clients call me and tell me that their bank refused to honor the power of attorney because it names co-agents. And while the bank may be wrong in refusing to honor it, I always tell clients that you are trying to avoid arguments with well-drafted estate planning document, not create arguments. As with the health care directive, Mr. Smith should name one or more successor agents.
As with a financial power of attorney, you can name co-executors, but co-executors must perform all of the jobs of the executor together. The executors must act together (for instance, both must sign every document that needs a signature, not just one of them), so it is not as if they can divide and conquer. Instead, they both have to be involved in every decision.
I recommend that clients name one child to each of the three primary roles—executor, power of attorney, health care agent—and that they name successor agents if the primary agent cannot serve. I recommend that the client chose the child he thinks would be best to serve in each of those roles based upon the child’s personality and skills.