Often, when I begin discussing who will serve as a Personal Representative, Power of Attorney, or Trustee with my clients, they want two or more of their children to serve together as co-fiduciaries.
Why clients want to name co-fiduciaries
- They fear hurting the feelings of one of their children
- Parents want their children to work together
- Parents feel one child alone couldn’t cope with the amount of work
- They don’t trust any one of them and hope that by requiring multiple signatures, all will be kept honest
You might be surprised that feelings will not be hurt. Being a parent’s power of attorney, trustee or personal representative is a lot of work. Some children just don’t want the responsibility. If issues exist among your children that will cause one to be jealous of the other, chances are problems will arise even if they are co-fiduciaries.
Families Working Together
Even siblings who get along famously have issues working together. The biggest problem is distance. If the two children live any distance apart, the logistics of getting together to get anything done causes the work to go forward very, very slowly. I have an estate right now where the co-trustees live only two towns apart but because of their schedules, they can almost never get together at the same time. So we end up having multiple meetings or mailing documents around. The estate is literally taking twice as long as it should to complete.
Another problem with joint fiduciaries occurs when each child thinks the other is handling a task. This type of misunderstanding also causes slowdowns.
Coping with the Work
The reality is that one child tends to do most of the work anyway. It may be because he or she is the most responsible, or lives the closest. Having co-fiduciaries, when only one is doing the bulk of the work, results in the hurt feelings you were trying to avoid. Another reality is that in many functional families, the children all work together regardless of which one is actually named the fiduciary. For example, the fact that only one of four children is the Personal Representative does not stop the others from helping with cleaning out the house or interviewing realtors, etc. The only thing the non-fiduciary children can not do is actually sign the contracts.
Two Signatures will Keep Them Honest
Of course, the two could join forces and go against your wishes. However, on a practical level, banks are just not set up to scrutinize checks to be sure that both signatures are included. So any check with one signature will probably be honored.
How should you pick one fiduciary from among your children?
If you make a logical decision with your attorney based on the following factors, you will have a good answer for the children when they ask how you made your choice.
- Honesty. The most important factor in selecting a fiduciary is honesty and fairness. If your child doesn’t understand investments, he or she can ask for help or hire a financial adviser. You can’t hire anyone to teach honesty and fairness.
- Physical Proximity. A child who lives nearby will have fewer travel expenses and can more quickly and easy take action when needed. Particularly when considering a child to be your power of attorney or health care proxy, proximity is an important consideration.
- Capability. You know which child is best at paperwork and deadlines.
- Availability/Willingness. You also know which child as already doing most of the work. The child who is already helping you with your paperwork, helping maintain your home, managing your prescriptions, etc. This child has shown he or she is willing and able to take the time to help.
Birth Order and Choosing a Fiduciary
Birth order is not a good reason to select a fiduciary. Just being oldest does not mean a child meets the factors above. Likewise a daughter is not always the best choice to be the health care proxy and a son is not always the best choice to be power of attorney.
All this being said I have a unique problem in that I have identical twin boys. They are so similar I can’t say one is more capable, honest, or willing than the other. One lives a little closer than the other right now, but that will change. I guess I will need to name my sister instead!
Margaret Hoag is an attorney with Eckel, Morgan & O’Connor, LLC in Acton, Massachusetts. She concentrates her practice in the area of elder law, including long-term care planning, guardianship and conservatorship, MassHealth (Medicaid) application, estate planning, and probate administration.