New Year’s Checklist: Appoint a Co-Trustee Before Emergency

Recently, my law partner wrote on the importance of informing your family of your estate plan, choosing the right people for the right jobs, being mindful in your distribution choices, and overall, promoting family harmony - views shared by none other than Warren Buffet in his recent Wall Street Journal article.

Today I write to slow you down, and hone you in, on a vital message from our recent article: appoint a Co-Trustee before you are in emergency. This cannot be stressed enough. Here’s why:

1. When you are in emergency, the task of appointing the Co-Trustee becomes MUCH more difficult.

Once emergency occurs, you might have lost the physical - or mental - ability to sign the document that appoints the Co-Trustee. You might be in the hospital or rehabilitation center or otherwise not in an easy position to get to the attorney’s office to sign that document or otherwise arrange signing. Let alone have the Co-Trustee sign their acceptance of the role. Physician’s certifications of your capacity might be necessary. It can be difficult for your family to obtain these certifications, not to mention distressing and scary for all involved. You and your family will be dealing with health issues. Who wants to deal with legal issues? Emotions run strong in an emergency, even in families who get along beautifully. Once the appointment document is signed and notarized, there still is the task of going to the bank and changing title to reflect the added Co-Trustee. After all, having signing authority at

the bank is the whole point. Banks have their own rules about who must show up to make a change. If you want to stay on the account as a Co-Trustee, you probably have to appear in person at the bank and sign along with the new Co-Trustee. The practical hurdles are just so exponentially bigger in an emergency that the good bones of the estate plan are actually jeopardized by family members looking for shortcuts to get signing authority because they need to pay bills.

2. You do not need to remove yourself as Trustee. You are just adding a Co- Trustee.

The argument that you do not want to give up your independence simply does not hold. You do not have to relinquish your role as Trustee. You can merely add a Co-Trustee to serve along with you. If you wish, the appointment documents routinely state that the signature of only one trustee is needed to transact business. The banks are protected in relying on that statement. Therefore, to seniors who resist adding a Co-Trustee because they don’t want to give up control, be assured this is not the case. You can stay in control if you want. Discuss it with your Co-Trustee. You can keep the checkbook. You’re just lining the Co-Trustee up to sign checks, etc. if you need help or go into emergency.

3. Many have zero qualms with creating a joint account (which is a bad idea!).

Why resist this?

Many seniors tell us they added their child to their bank account so the child can sign checks for them in an emergency. That is a bad idea – as reflected in many past

newsletters and blogs. Joint accounts with a child subject your assets to your child’s creditors, accidentally disinherit your other children, are ripe for fraud and theft, and create penalizable gifts for Medicaid purposes (to name a few of the reasons why joint accounts are dangerous). A trust with a Co-Trustee accomplishes all of the good things you want with a joint account, without the bad things of a joint account. A Co-Trustee is the right way to handle your concern about paying bills when you start needing help or are in emergency. The Co-Trustee mechanism is the most important reason why you have a trust in the first place for many of our clients.

4. It is quick, inexpensive, and easy to appoint the Co-Trustee before emergency.

Appointing a Co-Trustee usually does not require a full trust amendment. It usually requires a simple Appointment, signed by you as trustmaker and current trustee, and by the Co-Trustee. With this Appointment you get a simple one-page Certification of Trust to take to the bank to show who the trustees are, so the bank has something clear and simple to follow. Our Delaware statute at 12 Del. C. § 3591 expressly protects banks in relying on the Certification of Trust. Just contact our office and tell us you’d like to appoint a Co-Trustee. It takes very little time for us to counsel you, prepare the documents, and conduct signing. Think of it as a ministerial step just using the estate plan you already have in place, because that really is all it is.

5. You might regret it if you don’t.

This is sad but true. To parents who resist, do you really want crisis when you are in emergency? To potential Co-Trustees who raise the question but then back off to avoid argument, be wary. Of course it is the client who must decide. And if it is not time to appoint the Co-Trustee, then it is not time. But if a senior and potential co- trustee are already sharing information and working together for life management, even if only in very small ways, what is the downside to appointing the Co-Trustee the senior trusts, whom the senior can direct to not do anything unless called upon?

6. As Certified Elder Law Attorneys, we have studied this and do this all the time. We make it easy for you.

This duplicates #4 to some extent. But the point here is, trust us. Like physicians

who specialize in geriatrics, we specialize in Elder Law and special needs planning, and we are members of more than 500 Certified Elder Law Attorneys in the nation, requiring a difficult exam, peer review, and demonstration through representative matters of deep and varied elder law subjects. Plus, we have to re-certify to the National Elder Law Foundation to keep our certification which requires continued demonstration of expertise in these areas. This is our life’s work and calling and we are in a shared intellectual community with others of the same certification. Appointing a Co-Trustee before you are in emergency is best practice and very easy to do.

7. Make this question a New Year’s Checklist item every year until you appoint the Co-Trustee: Should I call my attorney this January to appoint the Co- Trustee this year?

We all get busy carrying out our New Year’s goals in January. But did you actually identify the most important goals and just get them done? Kicking the can down the road to avoid an argument leads to chaos and hurt feelings. At a minimum, you and your potential Co-Trustee should commit to asking this question every year in December until you appoint the Co-Trustee: Should I call my attorney this January to appoint the Co-Trustee this year? Both write it on your calendars. By February or March the task could be completed and behind you for good.