En español | The older we become, the more likely it is that we will need some help with our day-to-day life and finances. Most family caregivers are tasked with some degree of medical and financial coordination for their care partners. It's important to consider who your caregivers will be and give them the authority to help you with these tasks without having to go to court to get it. The way to do this is by appointing your legal representatives in estate planning documents.
As an attorney, I walk clients through planning consultations every day. We spend a lot of time deliberating who should be appointed to serve in important roles like health care surrogates, power of attorney agents, executors and trustees, and flesh out those duties in a well-rounded estate plan. Each of these roles is a type of caregiving. And while I can offer suggestions and help guide the deliberations, the final decision is always up to the client.
The decision process is not to be taken lightly. The caregivers you name in your estate planning documents may someday have control over the medical care you receive, your assets and property, and even where you live and how you spend your days.
Without valid legal documents, you will be leaving the decision up to your state's proxy, guardianship or conservatorship laws. And the representatives who may be appointed by a court may not be whom you would want. Naming your representatives while you are of sound mind will prevent that undesirable result and gives you control over your affairs — even when you can't speak for yourself. These tips will help you with the decision-making process to determine who the right representatives are to best serve your interests in life and beyond.
How far ahead you should plan?
Even if you're young and healthy today, plan like you'll need caregiving tomorrow. Tragedy does not discriminate, and the unexpected may happen. While that's a scary thought to many, this can also be a helpful thought when making your legal documents. Here's why: When you're selecting your future representatives, you don't need to think about who it should be in five, 10 or 20 years. My clients say things like, “My brother is a good choice today, but he'll be too old in 10 years to caregive for someone else.” My response is always, “If he's a good choice today, then you have your answer. Ten years is a long way away.”
So, choose your representatives based on current circumstances, not what you think will happen down the road. Your documents can — and should — be updated as life goes on.
Types of representatives
Your estate plan may include the following roles. Terminology and qualifying factors vary by state, so consult with an attorney in your state of residence with any questions about these roles and the right estate planning documents for you.
Health care proxy/surrogate
Your health care proxy (or surrogate) can obtain your information from your medical providers and make medical decisions for you if you are unable.
This person is most likely to be your hands-on family caregiver. He or she will be by your side in the hospital, talk to your doctors, and consent to or decline treatments for you. This may include life-or-death decisions. Your health care representative needs to be your biggest advocate; he or she must act in your best interests, not their own. He may be asked to share information and communicate with your other loved ones who want details about your care. This is usually where family conflicts arise: Your surrogate will run interference and may need to deal with unsolicited opinions and disagreements.
A balance of empathy and toughness is required for this job. As a caregiver, I've had to be a super-squeaky wheel to get a doctor's attention ("We're not leaving until the oncologist gives us more than five minutes of his time and answers all our questions!"). I've had to tell family members to butt out when they questioned our selected course of care ("Yes, we are bringing hospice in to help with pain management! No, it doesn't mean we're giving up and letting Mom die!"). I leaned on the old adage that you can't please everyone all the time, and my goal was to get my care recipient the best darn care and the least amount of family stress possible.
Your surrogate also must be capable of jumping headfirst into the caregiving role. If the person lives out of state, will he or she be able to travel to you, if needed? If the surrogate has their own physical or mental disabilities, will it be possible to hire professionals to help her with the caregiving tasks she can't manage? Will the surrogate or proxy struggle to meet the demands of intensive caregiving? Above all, remember that help can be hired and your surrogate can act remotely if necessary. The most important thing is that your surrogate is ready, willing and able to serve.
Your attorney-in-fact (also called your agent) is given power through a power of attorney. He or she can act for you only while you are alive and have the authority to make decisions on your behalf for your financial and legal affairs. The agent may be permitted to act for you even though you are still mentally sound or may only be permitted to start acting for you once it's proven that you're incapacitated.
When your agent starts the role depends on the type of power of attorney you make. The authority may be limited to certain tasks or could be totally inclusive of anything you would do for yourself.
It's fair to say that your agent has a tremendous amount of power. Because of this, the law holds your agent to a “fiduciary standard” — meaning if he or she is not acting in your best interests, he can be held civilly or criminally liable. That means the agent can be sued or even be charged with a crime for not handling your affairs appropriately.
Dependability and the desire to learn and seek help when needed are traits of an effective agent. Your agent should be well-organized and be able to keep good records. This is important because the agent may have authority to spend your money or make changes to your financial planning. Good recordkeeping protects you and keeps him from getting in trouble with the law.
Your agent must understand the scope of what the power of attorney authorizes him to do, and not do anything that the power of attorney doesn't allow. Most importantly, your agent needs to discern when he or she should consult professionals, like accountants or certified financial planners, for guidance. Your agent doesn't need to go it alone. We encourage anyone who is starting to provide care and use a power of attorney to reach out to professionals to help carry out the duties as successfully as possible.
Executor and trustee
Your executor is in charge of administering your estate after you die. This means he or she will have to take an inventory of your estate assets, retain an attorney, pay your creditors, prepare your final taxes, and distribute assets to your beneficiaries.
Depending on the type of trust you set up, your trustee may be able to act on your behalf when you're alive or after your death (or both). The trustee will have the power to control your assets according to terms and conditions you set up in your trust.
For both of these roles, look for someone who is good with money. Persistence and efficiency are also positive traits. Like your agent, the executor and trustee are held to a fiduciary standard. The courts don't look kindly on lazy fiduciaries. So, if the executor is not handling affairs or progressing a probate case forward, the judge is going to ask for an explanation. And if a trustee is not following the terms of the trust, the trust beneficiaries are going to start demanding answers.
That's not to say that your executor or trustee needs an MBA to serve. Remember, he or she will have attorneys and advisers guiding them. The most important thing is that your executor and trustee are dependable, trustworthy and will rise to the occasion.
Considering your options
You do not need to appoint the same person to manage your health care and money. One of your children may be efficient and a whiz at accounting. The other may have a nursing background and be an excellent communicator. In that case, wouldn't it make the most sense to put one in charge of your medical needs and the other in charge of financial management?
And you do not need to appoint a family member at all. Recently, I was doing some spring cleaning in my files and found a relative's old estate planning documents. She had named me as her health care surrogate and executor in her will. I remembered that she had done that, but had forgotten that she didn't name her next closest relative to serve in any role if she became sick or passed away. Instead, she named a friend. It made sense; the friend had a medical background and my relative had cared for the friend through cancer in prior years. The friend had the life story and perseverance to be a top-notch caregiver. Like in my relative's documents, if you have a friend who is qualified and willing to do the work, then name your friend.
Sometimes, people ask what to do if they have no good choices in their friend or family circles, or no friend and family circles at all. Selecting a neutral professional is a solid alternative. You can name caregiver advocates, attorneys or accountants, financial institutions or trust organizations to serve in these roles. The benefit here is that these businesses will serve in a fiduciary role with a high degree of professionalism and competence. While this may cost more money, it ensures that your interests are protected and wishes followed. And it can prevent family drama and possible litigation in more contentious families.
Don't worry about hurt feelings
My clients often say, “Can't I just name both my children to be power of attorney (or executor, or surrogate, or trustee)? I don't want to hurt anyone's feelings.”
My answer is this: While the law may allow you to name co-representatives in your legal documents, you may not be happy with the practical result. If your co-representatives can't agree or don't work well together, you can expect lawsuits, court battles and fractured families. Meanwhile, you are not receiving the best caregiving you deserve. If you don't think the co-representatives will be able to work together, then name a primary and an alternate if the primary can't do the job. If you do decide to name co-representatives, you may not want to name more than two co-representatives at a time. While it can be nice to have odd numbers to help with tiebreakers, too many cooks in the kitchen almost always spoil the soup.
The best way to prevent hurt feelings is to talk to your loved ones. This can be in person or in a letter of instruction. Tell your family what you want if you need caregiving in the future. Tell them who is in charge and why. If it's not a surprise in the middle of a family crisis, your care will go more smoothly and your loved ones are more likely to work together and not give your legal representatives a hard time.
Leave a road map
Don't shy away from talking about how you want to live if you lose the ability to be completely independent. Talk it through with your possible caregivers and representatives. The roles you are assigning them come with great responsibility. A transparent conversation or instructions about your finances and wishes will be their road map and ease their caregiver stress. What you share with them today makes their lives — and yours — easier tomorrow and provides peace of mind for all involved.