Estate Planning Tips: How to Pick POAs, Health Surrogates and Trustees

Posted by Ronald J. Fichera Feb 20, 2023

Consider these tips before you add to your estate planning documents the names of the people you want to carry out your wishes.

Death and incapacity are hard topics to discuss and even more difficult to plan for. We would like to think the good times will go on forever. However, we know that is not reality. To help with the challenging decisions of who to choose to represent us, here are some estate planning tips.

Both death and incapacity, to some extent, will reach many of us at some point in our lives. Therefore, we need to make the appropriate preparations, which entails completing our estate planning documents. The most common and important documents are the last will and testament or trust, power of attorney, and health care directive. 

For my clients, one of the most difficult parts of the process is selecting the correct representative to serve in each role. Below are some considerations to take when selecting representatives for each of these positions.

Power of Attorney

As we grow older, we become less able to manage our own affairs. A power of attorney appoints a representative(s) to handle our affairs for us on a broad scale. It is a very powerful document, and the obvious primary concern is appointing someone you trust. Remember, most likely, you will not be completely competent when it is necessary to use this document, so appointing an individual(s) you trust is paramount.

Finally, I always advise my clients to appoint multiple powers of attorney who can act independently of one another. There is a lot of work that is involved in managing a person's affairs. It might be too much for one person who also has their own life to manage. I find it works better if the work is spread out among multiple people so not any person feels too overwhelmed.

Health Care Directive

This document appoints someone to make a medical decision for you if you are unable to do so yourself. Most everyone appoints their spouse as the primary person to make that decision.

The real question becomes who to appoint as the successor representative(s). If you are fortunate enough to have a person in the healthcare field as a family member, then the choice may be an easy one. For the less fortunate, it should be a compassionate person with the skills necessary to be able to discuss your situation with treating physicians and make the right decision on your behalf.

This is not the time for a committee, so I recommend picking a succession of individuals instead of having co-representatives. Having more than one agent could cause an issue if they both do not agree on the best way forward.

Personal Representatives and Trustees

Most likely, a spouse will be the primary appointment, whether that be as a personal representative under a will or a trustee of a trust.

If you have chosen to complete a will document, it is best to discuss your alternate choice with an attorney before making a selection because restrictions on appointment can vary from state to state. In Florida, an out-of-state resident cannot be a personal representative unless they are related to you. Many states have similar restrictions.

Trusts do not have such restrictions. If you are a high-net-worth individual and have a more sophisticated estate plan, you might want to consider the services of an independent fiduciary, such as those provided by a bank or other trust advisory institution. If you don't fall into the high-net-worth category, then you may want to consider these options when making your selections.

Distance or proximity to you or your home state should not be a factor. Today, out-of-state agents can operate just as easily as in-state alternatives.  A majority of probate and trust administration can be handled electronically, so physical presence in the state of the decedent is not necessary.

You need to select an individual who not only has the aptitude but the time to perform the administration that you are going to require. Time is a key factor because there is a significant amount of work involved in every estate.

Finally, since most estates involve handling money and assets to a certain extent, you must appoint someone with the morals to fairly carry out your objectives.

There are unique characteristics to consider when selecting a representative(s) for the different roles outlined above. It is imperative to select the right agent that fits each unique position. They may be the same person or different people as your situation dictates. Keep the above factors in mind when making your decision, and you will be on the right track.

This article was written by Richard M. Riccardi, Jr., for Kiplinger Magazine and brought to you by the Ronald J. Fichera Law  Firm, where our mission is to provide trusted, professional legal services and strategic advice to assist our clients in their personal and business matters. Our firm is committed to delivering efficient and cost-effective legal services focusing on communication, responsiveness, and attention to detail. For more information about our services, contact us today!

You can click on this link for the Social Security website: The United States Social Security Administration | SSA

This is not tax advice and should not be construed as such.  Please seek professional tax services for more information and advice that will apply to your specific tax situation.

Content in this material is for general information only and is not intended to provide specific advice or recommendations for any individual.