It is no secret that family or friends of an aging person are faced with many challenges when they try to care for the elder, both physically and financially. I will use the term “Settlor” to mean the aging person who established a living trust or is the principal of a medical or financial power of attorney. The person who steps in for the Settlor will be called either the “Agent”, if serving under an Advance Health Care Directive, or a “Successor Trustee” if serving under the Settlor’s Living Trust.
WHEN TO STEP IN?
When does the Agent or Successor Trustee need to step in to assist the Settlor with his or her medical or financial decisions? The answer is not always clear.
The process of aging is a slow process. A person=s physical and mental health on any given day may appear to be stable. When viewed over a period of months or years, significant signs of aging are notable. Rarely is there a specific time in which it is obvious that the Agent or Successor Trustee needs to step in and take over the decisions for the benefit of the Settlor.
The need for the Agent to step in regarding the Settlor’s health care decisions is often easier to see than the need to step in for the Settlor’s financial management.
For example, if the Settlor has an medical emergency, whether accident or illness, which causes him or her to be physically unable to make his or her own medical decisions, the primary Agent under the Settlor=s Advance Health Care Directive can bring a copy of the Directive to the hospital to show the attending physician and medical staff that he or she is designated to serve and can begin working with the health care providers in making the appropriate decisions the Settlor set forth in the Directive.
WHEN TO STEP DOWN?
When does the Settlor need to step down and let his or her Agent or Successor Trustee take over making medical or financial decisions?
One of the challenges facing the Settlor is determining when is it in his or her best interest to let go of being in charge of his or her own financial responsibilities. Settlors are independent people. They are used to managing for themselves and deciding how and when to spend their money. They’ve been doing so quite well for all of their adult life. Letting go of that responsibility can make a Settlor feel insecure. Accepting the increasing limitations of aging can be difficult. Most people think of themselves as strong and competent. It is humbling to think one has become unable to do things one used to be able to do very well.
At what point should the Settlor step down and ask the Successor Trustee to take over his or her finances? My experience has been that the Successor Trustee (a child of the Settlor, perhaps) senses the need to step in and take over all or some part of the Settlor’s financial matters before the Settlor is ready to step down.
Sometimes this stems from the Successor Trustee witnessing the Settlor being a victim of one kind of financial scam or another. Sometimes, the Successor Trustee learns that the Settlor is suddenly beginning to lose track of how his or her money is spent. Sometimes, the Settlor does not see himself as the Successor sees him. The decline in mental or physical health can be so gradual that is becomes extremely difficult for the Settlor to determine when the time has come to step down.
STEPPING IN GENTLY
The issues and the best ways to deal with them are often driven by the personalities and relationships in the Settlor’s life.
If the Settlor has family members who are willing and able to step in, and if the relationship with the family members is such that they seek to do what is in the best interest of the Settlor, it generally makes it easier for the Agent or Successor Trustee to step in and for the Settlor to step down. It is more difficult in circumstances where there is not a good relationship or the Agent or Successor Trustee does not put the needs of the Settlor first.
Sometimes, the Settlor has no family available to step in. In such cases, there may be a long term friend who may be able and willing to step in. When there is no friend or family member able to step in for the Settlor, there are private professional fiduciaries who are in the business of providing such services. An estate planning attorney can assist in finding such a professional.
Regardless of who the person is who steps in, the best candidate for serving as an Agent or a Successor Trustee for the aging Settlor is someone who is compassionate towards the Settlor. Being able to understand the challenges the Settlor faces in dealing with his or her changes in physical and mental health, and having compassion for the Settlor being in such a situation, can go a long way in helping the Settlor to agree to step down.
My experience has been that Agents or Successor Trustees who come to the Settlor with a preconceived plan for managing the Settlor=s physical or financial life have a more difficult time in accomplishing that objective, even when it is a sensible plan, than an Agent or Successor Trustee who first engages with the Settlor in a conversation about how the Settlor wants to manage his or her physical or financial life. Sometimes, the Settlor becomes stubborn and implacable when faced with a situation in which he or she perceives that someone is trying to tell him or her what to do.
Respecting the Settlor’s decisions, even if the Agent or Successor Trustee disagrees with those decisions, can open a path of communication. Since the aging process is a slow process, the Agent or Successor Trustee may have a number of opportunities to discuss a given decision, and its ramifications, over a period of time. Ultimately, though, the decision remains with the Settlor as long as the Settlor is capable of making his or her own decisions.
There can be steps taken to reduce the Successor Trustee’s concern that the Settlor is spending his or her money imprudently. Sometimes the estate planning attorney needs to step in to help resolve differences of opinion. However, these differences may be resolved without the need to bring in an estate attorney by first trying compassion and gentle persuasion.