I received a call from the cousin of a client who is acting as our client’s attorney-in-fact. Our client is in her early 90’s and is receiving daily in-home care. Her husband passed away a few years ago; this cousin also acted as the Personal Representative of his estate.

The cousin was calling to let me know he would be resigning as our client’s attorney-in-fact and that our client’s daughter would now be taking on that role, as outlined in the Power of Attorney. I wondered what led to this change of roles – a falling out among the cousin and our client’s children, or was something not going as planned? He shared that he’s now in his late 70’s and is facing some health issues himself, along with his wife, and he felt he needed to focus on taking care of himself and his family so they could spend as much time as possible with his children and grandchildren. He knew his cousin’s daughter was fully capable of taking on this role and so was comfortable passing the responsibility to her.

The people you name to represent you – whether in life when you are unable to make decisions or cannot be actively involved in financial or medical matters, or at death when your estate is settled and assets are distributed to your chosen beneficiaries – is one of the most important decisions to make in your estate plan.

While people frequently name their kids to act in these roles, adult children may not always be the most appropriate choice for a number of reasons, especially when mom and dad are relatively young themselves. The children may not be financially responsible, may not have an understanding of their parents’ financial or business picture, the parents may desire to keep their business and financial matters private from their children, the parents may have a close friend or relative who is in the finance, legal, or medical (for healthcare surrogates) field.

People in their 40’s through 60’s often choose siblings or friends – someone closer to their generation with more experience – to act as their attorney-in-fact or healthcare surrogate rather than children. But once people are in their 70’s, it makes sense to consider revising that designation to someone younger, or at least ensuring a younger back-up is also named in your documents.

People can certainly serve in these roles at any age, but it’s important to be practical when thinking through the ongoing commitment. Naming a person in their 70’s to serve as trustee for a 10-year-old beneficiary will likely mean finding a replacement in the future. Managing the expenses of medical care for an elderly individual may be more stress and more of a time and emotional commitment than an older individual may be up to making.

The cousin asked if we needed anything on our end or if he needed to take any additional steps to make the transition effective. All we needed was a letter of resignation from the cousin stating that he was no longer acting as our client’s attorney-in-fact. Because our client’s Power of Attorney was drafted just a few years ago and included names of individuals listed as back-up attorneys-in-fact, there was no need to update the actual Power of Attorney document (which would have been challenging to do given our client’s diminished capacity).

We connected with our client’s daughter now acting as her attorney-in-fact – who we had spoken with and met several times over the course of our relationship with her parents – to answer any questions she had about her new role. We reviewed a snapshot of her mother’s financial picture, outlining the types of assets she owns and explaining how her mother’s assets and various income sources provide for her care.

As a component of the planning services we provide for our clients to help them grow, protect, and enjoy their wealth, we review our clients’ estate planning documents and highlight the named individuals at every review. Plenty of times all is in good order and no updates are warranted. But over time, life happens – circumstances change, and the designations you had outlined several years ago may need to be updated. If you have questions about your estate plan or are wondering if you have the right people listed in your plan, we’re happy to talk with you.

This material is not financial advice or an offer to sell any product and is not a recommendation to buy or sell any particular security. The opinions expressed are those of the Saling Wealth Advisors’ Management Investment Team and are subject to change without notice.

Saling Wealth Advisors (“SWA”) is an independent SEC registered investment advisor. Registration does not imply a certain level of skill or training. This material is provided for informational and educational purposes only. More information about SWA including our advisory services, fees, and objectives can be found in our Form ADV Part 2A, which is available upon request.