August 17

Picking a Trustee

Cortes Law Firm Oklahoma City Estate Planning Attorney

Picking a Trustee for a Stress Free Estate Plan

Today, we're gonna talk about picking the correct incapacity trustee for your estate plan. Let's jump right in.

You know, when new clients come to my office they are always surprised at how much time we spend talking about what happens if they become incapacitated. A common misconception is that estate planning means death planning, and that is simply not true.

Planning for what happens after you die is only one piece of the giant puzzle. It is just as important, and I would say sometimes probably even more important, to make a plan for what happens if you become incapacitated. You need to plan for the right now. Guys, estate planning is also about having an incapacity plan.

So, first let's talk about what happens when you do not have any type of incapacity plan at all. If you do not have an incapacity plan, then your family is going to have to start a guardianship proceeding in court with a judge. Luckily, in Oklahoma, we have some really great probate and guardianship judges because it is completely up to them who should have guardianship over you if there is no incapacity plan in place.

You see where we're going with this and how important it is? Without a guardian, your family will not be able to get control of your assets or make medical decisions for you.

A circumstance we see over and over again is elderly fraud. It is so frustrating, but once a tele-criminal has identified someone that will sign up for things over the phone, things can get bad really quickly. And like I said, we see things like this on a regular basis.

These tele-criminals will call an elderly person and get them to sign up for a non-existent service that's only $20 a month by automatic bank account draft, of course. Then a few days later, or maybe a week later, they'll call back that same person then offer another great non-existent service. But this time, it's $50 a month. And to make it easy, the tele-criminal will set up another automatic monthly bank draft.

Months go by, sometimes even years, before the family realizes the tele-criminal has swindled their loved one out of thousands and thousands of dollars. This happens all the time, guys. 

The problem is that sometimes the family can't do anything until they have a guardianship in place to access bank accounts and stop this fraud. Now, even if there's no fraud, and we just need a guardianship, the guardian will need to report regularly to the court and will be required to get the judge's approval before entering into certain types of financial transactions such as mortgaging or selling your real estate or even making medical decisions for you.

Guardianships will continue until you either one, regain capacity or you die, so you can see why it's so vitally important to have an incapacity plan in place and pick someone that you implicitly trust to make decisions and to care for you.

Who should you choose as your financial agent and your healthcare agent, or your power of attorney and healthcare power of attorney? Well, as you can see from the above discussion, a guardian has an important and vitally important role if you become incapacitated.

Creating an incapacity plan can help you avoid a court-appointed guardianship and save your family the time of having to go down to the courthouse. Rather than having a judge decide, your incapacity plan will have you appoint one or more agents to carry out your instructions exactly the way you want them.

Now, there are two very important decisions you must make when putting together your incapacity plan. First, who will be in charge of managing your finances if you become incapacitated? Second, who will be in charge of making medical decisions on your behalf if you become incapacitated?

Now, how do you pick for these important roles, and, I should probably pause at this point, and say they don't need to be the same person. In most cases, it probably is not even a good idea for them to be the same person.

We all know the strengths and the weaknesses of the family and friends in our lives, right? While Amanda might be a great financial power of attorney, there's no way in the world you want her in charge of medical decisions and pulling the plug, as they say. Likewise, your son Enrique is great at making medical decisions, but he can't balance his checkbook if his life depended on it, so you don't want him anywhere near the finances.

Not too long ago, it was very difficult to manage affairs from across the country or even from another city. With modern technology, the distance between folks has shrunk and really does not matter anymore. We have some trustees managing our clients' estates from as far away as Europe.

However, someone who lives nearby may actually be a better choice than someone who lives in another country or across the United States. Your power of attorney will need to be well-organized to manage your healthcare needs, keep track of your assets, pay your bills, and balance your checkbook in addition to being able to manage their own finances and their own family obligations. If your power of attorney has a demanding job or travels frequently for work, then they may not be the person and they may not have the required time to take care of your finances and your medical needs.

These are just a few thoughts on picking the correct person to care for you during incapacity. If you choose the wrong person to serve as your financial agent or your healthcare power of attorney, your incapacity plan is likely to fail and land you and your assets in a court-supervised guardianship.

Make certain to give this some serious thought. If you got value today, then please do me a favor and hit the like button below, and to get you started and thinking about what you should do, please download our estate planning strategies guide. I'll put a link in the description section below and also in the comment section as well. Well, that is all for today, have a great day, and always have an awesome week. Thanks for watching, and we'll see you again next time.


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