General Legal

Once I convinced my client, Mary, that a trust is a safe, and not so scary, way to protect herself and her stuff during any incapacity, she wanted to know who could possibly serve as a backup trustee?   According to Mary, her daughter was a kind and loving person who would do everything she could to support her mother, but her daughter’s financial skills were somewhat suspect.  Mary’s son is a busy family man with a great job, but he seems too busy to help Mary now.

Who could she choose? 

First, what does a trustee do exactly?  A trustee is a fiduciary, which means that he or she has a legal or ethical duty regarding the management of property for another.  Although a trustee may have either the duty to manage the trust assets or the duty to distribute those assets, many trustees both manage and distribute.  A trustee is usually responsible for investing the assets in the trust, distributing those assets to the beneficiaries according to the trust terms, and making sure any required accountings are prepared and that taxes are paid when necessary.

THE PROS AND CONS OF A POWER OF ATTORNEY

So, if you’re telling me not to put my daughter on my accounts, what are the alternatives?  How can I be sure I will have someone to take care of my financial affairs if I’m not able to?

In my last post, I told the story of Mary and her daughter, Nancy.  I pointed out the pitfalls to having adult children – or other people- as joint owners on real estate and bank accounts.  I promised I would share some alternatives to joint accounts.

One alternative is to appoint someone as an agent under a financial power of attorney.  The agent is authorized to make financial decisions for you if you are not able to make decisions – or if you just don’t want to make those decisions any more.

Mary and her daughter, Nancy, were very close.  Mary was still able to make all of her financial decisions, and paid all of her bills on time each month.  Keeping a high bank balance gave Mary comfort that she would be able to access money whenever she needed it.  She was worried that she might “lose it” at some point, so she asked Nancy to become a signer on her bank account.  She and Nancy became joint owners of Mary’s bank account, although Nancy acknowledged that her mother was the real owner of that money.

Sunday was the 67^th anniversary of the attack on Pearl Harbor and I found a few articles on survivors of the attack in the Atlanta Journal Constitution and online. According to the Department of Veterans Affairs, there are less than 5,000 current members of the Pearl Harbor Survivors Association. At its peak, there were 20,000 members of the Association. As of Sept. 30, 2008, there were 2.

As the parent of a 16-year-old soon to be licensed driver, I think a lot about whether she will be safe on the roads - and whether others who have to share the road with her will be safe!  At the same time, I worry about whether my aging clients are safe on the roads – and whether others are safe on the same roads with those aging drivers. In my practice I am regularly told stories –some funny and some frightening – about aging or impaired drivers. 

For my 16-year-old, the ability to get in the car and drive wherever she might like to go signals the ultimate freedom.  For my aging clients, the thought that they will no longer be able to drive wherever they want signals the end of that same freedom.  That is why the issues involved with the elderly drivers are so difficult and why we need to consider the options carefully before taking any action.