Practical tips for navigating a difficult decision

Choosing a fiduciary is an aspect of the estate planning process that many people find challenging. A fiduciary is a person designated to act on your behalf, which includes roles such as the trustee of your estate, the agent named in a power of attorney, your healthcare proxy, etc. 

It’s no surprise that naming someone to one of these roles can be challenging. Some people are concerned about how to choose among multiple children, while others might have hesitations around feeling like a burden to someone they love. While there is certainly some emotion involved in such decisions around estate planning, there are also some practical things to consider. 

There are essentially three categories of decision-makers to consider in the estate planning process:

• Financial decision-makers
• Medical decision-makers
• Guardians for minor children

Things to consider when choosing a financial decision-maker

When selecting someone to manage your financial decisions on your behalf, one of the top considerations is how they manage their own finances. Do they file their taxes and pay their bills on time? Do they have a history of making smart financial decisions? Do they carry a lot of debt or have needed to file bankruptcy in the past? How someone approaches their own finances is likely an indicator of how they will manage yours, so think about people you would trust to make smart financial decisions. 

Other important factors to consider are whether they have time to fulfill the role and whether they can treat all beneficiaries fairly. Think about any conflicts of interest that might exist for the person you’re considering when it comes to managing your finances, whether that conflict is a money issue of their own or a fragile relationship with another beneficiary. 

If you don’t want to choose a relative or close friend for this role, you can choose a corporate trustee, such as a bank trust department or trust company. Corporate trustees employ trust officers, trained professionals who will act on your wishes as outlined in your estate planning documents. While there’s a fee associated with a corporate trustee, the fee only applies when they are actively serving as trustee. 

Things to consider when choosing a medical decision-maker

One of the top considerations in choosing a medical decision-maker is whether they will honor your wishes. If you do not want life-sustaining measures used but the individual you name as a medical decision-maker feels strongly that every effort should be made, that can create a conflict for both of you.

You also want to consider if the person is a good caretaker, how well they will advocate for you, and how they handle stressful situations. You want someone who will stand up for what you want when you’re unable to communicate for yourself. While past experience with navigating healthcare details isn’t necessary, it can be helpful. If they don’t have much experience dealing with medical issues, it’s important to talk about what’s involved in serving as a fiduciary for your medical needs.  

Things to consider when choosing a guardian for minor children

For individuals with minor children, choosing a guardian can be one of the most challenging aspects of estate planning. Many people name a family member as guardian, whether a grandparent or aunt or uncle of the child. Others choose a close friend as guardian.

One of the most important considerations is the love and care that someone will demonstrate in fulfilling the role of guardian. Do they understand the commitment involved in raising a child? Are they prepared to help guide the child through the grief process of losing a parent or parents? 

Another consideration in choosing a guardian is stability of the child’s environment. Some parents will choose a close friend over a family member simply because the close friend allows the child to stay in the same city and attend the same school with familiar teachers and friends. 

Final considerations for choosing a fiduciary

When choosing a decision-maker for any aspect of estate planning, it’s important to have an open, honest conversation with them and confirm that they are willing to serve in that capacity. It’s also important to openly share your wishes with them and ensure they are willing to honor those wishes in how they handle your finances, medical care, or guardianship of children.

Our team has helped countless individuals navigate the sometimes difficult decisions that go along with estate planning and gain peace of mind for their future. Let us know if we can help you or someone you love with making a plan.