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Friday, September 22, 2017

Who Are the Decision Makers in Your Estate Plan? (Part 2)

Welcome back to the second installment discussing key decision makers.  Part 1 introduced the concept of decision makers and we named some active roles.  This week, we are finishing up this topic by naming a few more roles that are pertinent parts of running a successful estate! Enjoy!

Agent (Durable Power of Attorney for Healthcare Decisions)

This type of Agent deals solely with healthcare decisions.  In the event that you become incapacitated, this individual or entity would make any decisions relating to your health as you would want.  This responsibility may include decisions dealing with admittance or discharge from the hospital or health care facility, treatments, medical record disclosure, etc.

HIPAA Agent(s)

The Healthcare Insurance Portability and Accountability Act of 1996, otherwise known as HIPAA, protects an individual’s protected health information.  Healthcare professionals can be fined quite severely if HIPAA protocol is not followed and therefore, it is imperative that a HIPAA Agent is appointed in order to protect and invoke your rights in the event that you are incapacitated.  This person would step into your shoes, so to speak, when it comes to your protected health information.  Therefore, that specific individual would be able to obtain medical records regarding past, present, or future medical information, including mental health conditions.  Without an appointed agent, obtaining medical records that may be relevant to you and your family would be extremely difficult.   

Custodial Guardian

If you have minor children, you can name an individual as a Custodial Guardian to care for your children until age of majority in the event that you pass unexpectedly.  A Custodial Guardian is an individual that is appointed either by a family court, volunteers or nominated through a Will to raise an individual’s children in the even that they die before their children are adults.  Although this is a difficult thought, it is wise to consider incorporating into your estate plan to avoid the court process and the possibility of children being placed with a family member who you wouldn’t have picked for this.  Someone who your child/ren are familiar with and feel comfortable around and also someone who would raise your child/ren as you would want is preferable.  More on Guardianship law here.

Conservator of Minor Child’s Estate

When a minor child inherits money or property, it may go into a separate Trust for the child until the child is legally old enough to own property.  Therefore, an individual or entity is needed to manage the Trust and make distributions for the child; a Conservator oversees the costs associated with raising the child and will adhere to the directives that are binding from the inheritance and statutorily.  Typically, in a Trust-based plan, the successor trustee is the conservator. 

 

Generally speaking, a trusted, financially savvy family member would be an ideal decision maker.  Conventionally, a family member would have your best interests in mind and would be emotionally vested in those interests.  Be sure to keep in mind, that appointing someone who is going to live longer than you are is essential and someone who may be a “leader” or someone who the family respects.  Additionally, letting the other family members know who you picked will alleviate any issues that may arise after your passing, and will enable those who have interests in the estate to have a contact person. 

Close friends are also good options if you do not have a family member in which you would want to appoint.  However, the risk in this situation is that friendships are often not infinite, and therefore may require you to amend your estate if the friendship dissolves.  

An institution is an alternative option as well.  Appointing an institution may be a desirable choice if family or friends aren’t options or if the estate is more complex; entrusting an institution, particularly one that handles estate management regularly, will ensure that your wishes will be followed without any emotional or personal involvement or biases.  Keep in mind, appointing a company as a decision maker of your estate will be costlier and will take the personal element out of the management of your estate.  Regardless of your choice, make sure you have backups in case the first one or two do not work out. 

An ideal decision maker will follow your wishes laid out in your Will.  These individuals or entities will have to interact with an array of people (i.e. attorneys, accountants, banks, etc.) depending on the size of the estate, and therefore appointing a Personal Representative that would be able to efficiently communicate with different parties whilst representing the estate’s best interest is key.

As stated above, the role of a decision maker can be time consuming and may require a lot of attention and decision-making on the part of the individual.  Making funeral arrangements, asset evaluation, asset distribution, accounting for financial activities, and corresponding with lawyers, accountants and/or financial institutions are some of the duties involved with being a decision maker.

Let’s recap.  Regardless of who is picked and how you get there, being a decision maker in any capacity is a capacious job, and although it is regulated by state law, it still requires time and energy.  If you are appointing someone, give deference to this time commitment and inform your potential decision makers that this responsibility exists.  If you are appointed as a decision maker, make sure you allot time for the responsibility; if it’s not something you are interested in, let the Grantor know ahead of time so they can appoint someone else.  The “ideal” decision maker will have a list of great qualities; however, it is a completely innate choice and factors deemed necessary are at the discretion of the individual or statutorily through probate.

-by Laura Bown (Law Clerk/JD Candidate, 2018, Boyd School of Law, UNLV) with Tiffany Ballenger Floyd, Esq. (Nevada & California Estate Planning Attorney), Phillips Ballenger, PLLC


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