Coordination of the People You Name

Coordinating the various positions in your estate plan and the individuals named in those positions is a daunting task, and you might have a conversation with all named people to emphasize that they will need to work together. Even if the individuals in various positions may be appropriate to serve and want to assist you, the way those potential fiduciaries interact with each other is another facet that you must consider. The first step in coordinating all the persons you have or will name in your plan is part of the objective of this paper. You first have to identify all the people who might be involved.

Consider the following examples.

• Your financial adviser might know the names of the people you have designated as beneficiaries of your IRA and the name of your trusted contact person to be called if elder financial abuse is suspected. You authorize your investment firm to call this person if they reasonably believe that your account may have been subjected to financial exploitation or fraud. However, your financial adviser may have no idea who is named in your financial power of attorney, and the agent appointed in that document may be inadvertently different than your financial adviser’s contact person. Also, the power of attorney document might give your financial agent the power to change beneficiaries on your IRA. Still, the agent may not know your financial advisor or the people named as beneficiaries.
• You name someone to serve as the agent under your medical power of attorney (health proxy) to make medical decisions. Some of those decisions must be paid for by the agent named under your financial power of attorney. Because the skills and personality of someone making medical and financial decisions are so different, people commonly name different people to each role. But if the financial agent chooses to contradict or challenge a medical decision made by your health care agent by not paying for it, that could undermine your personal health care wishes or even your care. Discussing with the person you appoint as financial agent how you wish them to defer to the decisions of the health care agent might be important. You might even coordinate that hierarchy of authority in the legal documents.
• It’s not uncommon for individuals to name a different person to act as an agent under a medical durable power of attorney, healthcare proxy, or living will (collectively “medical directive”). A different skill set may be required to make medical decisions than those needed for handling finances. Your adult child who can’t balance a checkbook may be most attuned to your wishes and end-of-life considerations or likely to carry them to fruition. Not every person has the wherewithal to “pull the plug.” But what happens when the agent under a medical directive you decide to stay home and contract for services as authorized under the medical directive, but the trustee or agent under a financial power of attorney believes payment of those expenses is unreasonable? Whose opinion/decision prevails? Might including a clause similar to the following mitigate these issues? “If I have executed a separate financial Power of Attorney form or document appointing any person or entity to serve as my financial agent or attorney, in fact, I request that my Agent appointed herein cooperate with such financial agent and keep such financial agent reasonably advised of expenses incurred, or likely to be incurred, in connection with my health care and related matters by my Agent under the powers granted in this Health Care Proxy.”
• If there is tension between the individual named as the trustee and trust protector of a trust, those issues may affect their ability to achieve your goals for the trust. 
• Say you created a revocable trust to manage assets during your disability and reduce probate costs. If you transferred your tangible assets (furniture, art collection, etc.) into the name of the trust, the person named as trustee and then the successor trustee will have control over those assets. If you did not transfer those assets, the person named as agent under your financial power of attorney may have control over those assets. Are they the same people? If not, what will happen? What do you intend to happen? Coordination and planning for the people you appoint is critical. 

Too often, different people are appointed at different times when different documents are done, and no one takes a step back to look at the big picture of all the people named and what it means. Just naming people you are comfortable with is not enough. The documents, people, and steps must be coordinated and kept current as life and circumstances change. Coordinating the people under the various documents is important to avoid conflicts.