The phrase “checks and balances” might bring to mind the Founding Fathers, or memories from your middle school Social Studies class. However, a “checks and balances” system can also be considered with respect to estate planning. Naming multiple individuals to serve jointly in a particular role (power of attorney, health care surrogate, personal representative, trustee, etc.) may provide the beneficial oversight one would dream of, or it may lead to unnecessary bickering and arguing among your loved ones. Simply put, there are advantages and disadvantages to naming multiple people. It is important that you discuss the following pros and cons with an experienced attorney, in order to determine the best estate plan for your particular circumstances.
If you are considering naming more than one individual to a particular role within your estate plan, you are probably thinking that it is best to have two individuals reach a consensus as to what you value, or would have valued, and how best to make that value a reality. This is the ideal scenario and the greatest advantage of naming multiple fiduciaries to serve jointly.
You may want to name a family member, who knows and understands your personal beliefs, along with an individual who has some expertise in the topic at hand. For example, you may wish to name your son or daughter as your Trustee because he or she best understands your values and beliefs. However, if your son or daughter is not financially literate, naming a financial professional as a Co-Trustee, such as an accountant, financial advisor, attorney, or professional trust company, might help your loved one accomplish your goals more effectively. After all, two heads are always better than one, right?
As you may know from personal experience, it can be very difficult for two individuals to reach a unanimous consensus. It can be even worse when there are more than two individuals involved. This is especially true with difficult decisions regarding one’s financial needs or health and well-being. Often, there can be significant consequences to prolonging the decision-making process, due to disagreements by the fiduciaries. Such consequences could include the requirement for court intervention, in order to proceed when disagreements have lasted far too long. The court process will further prolong the decision-making process, which would make the ordeal more burdensome for all of the fiduciaries, and ultimately for the person relying on the fiduciaries.
Naming only one fiduciary can substantially shorten the decision-making process, which would allow for a quicker facilitation of the desperately needed medical attention, or which could make it easier for the beneficiaries to receive the legacies which are left for them. Timeliness is essential to a successful estate plan.
Please note that the scenarios may vary based on an individual’s circumstances. The best way to prepare a successful estate plan is to discuss your concerns with an experienced estate planning attorney, who will help you prepare for life’s most challenging moments.