When Does Your Estate Plan Go To Work For You?

The three triggering events in the typical estate plan are:

Incapacity – Your documents might say two physicians are to examine you, and if they determine that you have lost capacity to manage your own affairs, they will each write a letter saying so.

Resignation – You sign a resignation letter, prepared by your attorney, which gives your consent to have your successor serve.

Death – A Death Certificate is prepared when you die as written proof you can no longer serve as your own fiduciary. Administering your trust is not a “Do It Yourself” project!

Notice that each triggering event has a writing which is relied upon by third parties such as financial institutions, banks, escrow companies, etc. Your successor must have this clear permission in order to do the work for which you have granted authority in your estate plan. Your successor (trustee, executor, or agent) will need to share their personal identifying information (ID, Social Security Number, home address, mother’s maiden name, and more) along with your estate planning documents, and the triggering event documentation (doctors’ letters, resignation letter, or death certificate) in order to access your properly titled assets. For more on titling your assets, see What is Your Trust Made of?

This is one of the main reasons to have an estate plan: to select persons to serve you when you can no longer manage on your own. Sometimes, the service is temporary. I had a client whose wife had died of cancer, then he found out that he had cancer. He thought he could manage just fine until one round of chemo had him hospitalized. He talked with his attorney, decided to resign as trustee, and then he granted immediate power to me also as his Agent on his Durable Power of Attorney, and as his Agent for Health Care Decisions.

With his resignation letter, I “marshaled” his assets. This means that I gained signing authority on all of his accounts with all of his financial institutions. I accounted for everything I found, and all transactions thereafter. Six months into my work, he had met a nice woman, and he was feeling better. He asked me to step down so he could resume managing his own affairs. He had capacity, so I promptly signed a resignation letter (prepared by my attorney) and provided the client with an updated financial report. He took my resignation letter to the very same financial institutions, and established his authority again on those same accounts.

Less than two years later (and after a world cruise), he died, and I became trustee again, utilizing his death certificate to marshal his assets.

You are better off naming someone to serve you when the time comes, and have proper estate planning documents, rather than adding someone as a signer on your bank account “just in case”.

Embrace the end of life as a time to relax. We do this by selecting someone we trust to do the right thing, for the right reasons. We have to name our selected persons in our documents and grant them the power to put our needs before their own. If family is not a fit, that’s ok. Please talk with your attorney about your concerns, and your alternatives.

Marguerite Lorenz, CTFA, CLPF is a Master Trustee and a Managing Partner at Lorenz Private Trustees (MyTrustee.net) and has served as a Trustee and Executor since 2003.

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