Dear Jonathan: I am in the process of preparing a will, a trust and powers of attorney and I am a bit stymied as to who to name as my fiduciaries on those various documents. I have three sons and to avoid hurt feelings, I think I need to include all of them in some capacity, but I am not quite sure how to go about this. Should I name all three to act, and if not, how do I determine who should act in what capacity and ultimately how do I avoid hurt feelings?
Jonathan Says: This is frequently a concern of clients, i.e., not wanting to hurt their children's feelings by not naming one of them as a fiduciary in their estate planning documents. My first recommendation is to set aside any concerns regarding the child's feelings and instead focus on which child is best suited to act as your fiduciary in those various capacities.
To better help you in making this determination, you need to understand what each fiduciary's responsibilities are. For example, the agent under your financial power of attorney, the personal representative under your last will and testament and the trustee of your trust, have similar responsibilities in that they are charged with the responsibility of managing your investments and assets.
Also, the personal representative has the additional responsibility of administering your will during probate and your trustee has the additional responsibility of administering the trust on behalf of the beneficiaries. The person you want to name as your agent, personal representative and trustee should be someone you deem responsible and has a track record of making sound financial decisions, as well as someone who is willing to pay attention to detail and carry out the instructions set forth in the will and trust.
On the other hand, the person you name as your patient advocate under your health care power of attorney may be someone who has a different skill set, i.e., health care training or at least someone you feel comfortable with making health care decisions on your behalf. This could be the same person who you put in charge of your finances or it could be a different child altogether.
I am not a big fan of naming multiple people to act in the same fiduciary capacity. The problem is that getting all of them to act together can be difficult, especially if they have different opinions as to what needs to be done or how to proceed. This just ends up delaying the taking of decisive action and could also have the effect of creating animosity between your children.
I also wouldn't name any of your sons as a fiduciary just to avoid hurting his feelings. It doesn't mean that you love that son any less, it just means that that son may not be the best person to act in that capacity.
Over the years I have seen children respond many different ways when they have been passed over by their parents when naming fiduciaries in estate planning documents. Some children are in fact offended or hurt if they are not named; some are suspicious of the ones that were named; and others are thrilled they don't have to act because of the time and effort those positions require.
My recommendation is that once you have made your decision as to who you want to act, that you advise your children of your decision and why. This way there will be no surprises down the road and if anyone has any questions or issues with your thought process, it can be discussed at that time. In the event all of your sons are qualified and you feel equally comfortable with naming any one of them, then you might name them in the order of their age, or based on where they live, with the closest one being given first priority. Both of these reasons are logical and easy to explain to your children. Good luck.
Jonathan J. David is a shareholder in the law firm of Foster, Swift, Collins & Smith, PC , 1700 East Beltline, N.E., Grand Rapids, Michigan 49525.