Friday, May 14, 2021

Who’s Looking Out for You?


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“Never be afraid to ask questions, especially of yourself; discovery is the mission of life.”

~ Brian Kates, Film Editor Question: My mom has Alzheimer’s. I’m concerned that I could face this same situation. What do you suggest I do regarding my future wealth and health planning? Answer: I’m sorry about your mother. We went through this with my mom so I know how challenging and heartbreaking this experience can be for everyone.

When someone loses the ability to make decisions; financial or otherwise, it can create difficulties for that person, family members, and others close to the situation.



According to the Alzheimer’s Association, this disease is the sixth leading cause of death in the United States, killing more people than breast cancer and prostate cancer combined. One in three seniors dies with Alzheimer’s or another form of dementia. These statistics along with the fact that we live longer, and often don’t have family nearby or able to care for us are reasons why proper planning is so important. I applaud you for thinking ahead.

Determining incapacity, even when legal documents are in place can be emotional and painful. Courts are reluctant to deprive people of their legal rights.

That’s why medical and psychological evidence are presented in court and a guardian is designated. Hopefully, you’ll never need to implement a plan for incapacity, but if so, I strongly suggest having the conversation ahead of time. The Right Tools for the Job

Revocable trusts aren’t just for estate planning, they can also define how incapacity is determined, who determines incapacity, if more than one opinion is required, how someone may benefit from a trust once incapacity is determined, and how care and payments will be handled, in addition to what would happen if incapacity is resolved and who makes this determination. Last but not least, who will control the trust assets will be outlined in your revocable trust.

Once you and your attorney have drafted and your revocable trust is signed, it’s time to retitle assets into the name of the trust before any incapacity may occur. For some assets, like certain qualified retirement plans it may not be possible or practicable to retitle. The goal is to retitle as much as you can into the trust’s name. Durable Power of Attorney

Revocable Trusts are wonderful, but they’re limited to the assets they hold. That’s why a durable power of attorney (POA) is a key document when planning for possible incapacity. A durable POA lets you designate one or more persons (referred to as “agents” or “attorneys-in-fact”) to act on your behalf in business, financial, and personal matters. “Durability” refers to the fact that even if you later become incapacitated the POA remains in effect. POAs are usually structured with a long list of powers that may be granted to the agent like bill paying, preparation and filing of tax returns, and dealing with insurers. You can include or exclude specific powers. Many POAs are “presently exercisable,” meaning that authority is granted to the agent at signing. For this reason, it may be wise to sign presently exercisable POAs and have the attorney keep the signed documents so they’ll only be used if and when necessary, not before. Who’s Best Interest?

If someone is named as successor trustee of a revocable trust or as an agent acting under a POA, they’re fiduciaries. Fiduciaries are required to act in your best interest. Unfortunately this isn’t always the case and there are too many examples of trustees and agents taking advantage of someone’s incapacity to benefit themselves. Here are a few ways to possibly protect yourself from the wrongdoing of trustees and agents, and a few things to consider when choosing a trustee or agent to act on your behalf. It’s a Big Job!

Naming several persons to act as cotrustees or co-agents may provide checks and balances against just one fiduciary’s wrongdoing or negligence. For example, a parent could name two children to act as co-trustees, or could name an attorney or trust company to act as co-trustee with a child. It’s a big responsibility and our kids live elsewhere and have busy lives, so we’ve named Raymond James Trust as a co-trustee to lessen the burden on each other and the kids. Talk About It

Have the incapacity conversation before there’s a need. Explain your choices and talk about what you’d like to have happen if you’re incapacitated. This will help set expectations and lessen unpleasant surprises for those involved. Team Work

Assemble your financial team during the preplanning phase to include the attorney drafting the documents, your tax expert and CERTIFIED FINANCIAL PLANNER™, and if appropriate, family members. This collaborative approach could help to more clearly define your intentions and support your best interests.

Working together now may reduce the risk of overreaching by fiduciaries and family members. Incapacity is in some ways more painful to discuss than death. Do yourself a favor and have the discussion now. Stay focused and plan accordingly.

Raymond James financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional. The opinions expressed are those of the writer, but not necessarily those of Raymond James and Associates, and subject to change at any time.

“Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.”

This article provided by Darcie Guerin, CFP®, Vice President, Investments & Branch Manager of Raymond James & Associates, Inc., Member New York Stock Exchange/SIPC, 606 Bald Eagle Drive, Suite 401, Marco Island, FL 34145. She may be reached at 239-389-1041, email Website:

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