Reason #8 to Update your Estate Plan: Your Decision Makers Have Changed
Decisions, decisions, decisions. Sometimes decisions are easy: two scoops instead of one, for example. Easy. But there are lots of decisions, especially in estate planning, that take a little more thought.
One of the most important decisions you’ll make is selecting who will make decisions for you in the event of your death or disability. There are several decision makers you should have as part of your trust:
- Successor Trustees – These are the people who will be in charge of executing your instructions in the trust upon death or disability.
- Guardians – These are the people who will be in charge of looking after your minor children and making sure they receive needed care.
- Health Care Agents – These decision makers are responsible to work with your doctors and may be required to execute end-of-life instructions (including “pulling the plug” when needed).
Obviously, each of these decision makers carries a great responsibility to you, your loved ones, and your estate. We should make sure we have the right people in place now, and that means things may have changed since you last looked at your trust.
Typically, when the kids are younger, clients will have the same person(s) act as both Trustee and Guardian. This makes sense—the finances, execution of the trust, and care for young children can all be entrusted to the same responsible party, let’s call her Aunt Sally. But when your kids have grown, Aunt Sally may not need to be involved anymore. You could now make your children the Trustees, and they could be in charge of their own trust when you pass away.
Another reason to take a look at your decision makers is that relationships can change over time. Maybe the person you once considered the best choice has drifted away or proven to be less-than-responsible. That would indicate that it is a good time to make a change. Again, this is one of the most important parts of your trust, and you need to constantly ensure that you have the right people in place.
You should consider adding a “Trust Protector” to your trust. This is something that may not have been available when you first created your estate plan, but it can make all the difference in having peace of mind. The Trust Protector serves as a sort of watchdog over your trust. This person is an independent party, such as an attorney, CPA, or someone else who doesn’t have a vested interest in your estate distribution and execution. This person can be called upon to intervene if one of your named decision makers isn’t doing an acceptable job in their duties.
For example, if a Successor Trustee is needlessly squandering your assets (or even worse – stealing), the Trust Protector can stop it. They can do this without a long, drawn-out court process because you have previously granted them this decision-making authority.
A Trust Protector can also make changes to the trust after the client has passed away to adapt the trust to changing tax laws or regulations, for example. It’s a nice benefit to be able to deal with unforeseen, changing circumstances while still honoring the wishes of the client.
Now is the time to review your trust to ensure that you have the proper decision makers in place. And if you haven’t yet had the opportunity to add a Trust Protector, you can do it now. You’ll rest easy knowing that the people you trust are in place to take care of the things you love the most.
The only choice left after that is a tough one: Pecan Praline or Chocolate Chip?