Elder Law

Medicaid v. Medicare
Medicaid is a welfare benefit program that pays for basic medical care including custodial long term care
Medicare is a federally funded health insurance plan for adults 65 or older and for people under 65 afflicted with certain disabilities
Medicaid is the only government program that pays for custodial long term care Medicare does not cover custodial long term care
Medicare pays up to 100 days of hospitalization
Medicare pays for medical care costs and pays for “rehabilitative” institutionalized care on a limited basis
Medicaid imposes asset and income limitations as a prerequisite of eligibility Medicare requires earned income history
Why Medicaid Planning?

Glossary of Medicaid Terms
(Medicaid Practice Systems, LLC 2006)

  • Long Term Care Planning
Long term care refers to housing and healthcare options for when you are no longer able to perform daily living activities such as eating, bathing, toileting, and dressing.  The main aspects of long term care planning include: 1. In-home care, 2. Residing in an assisted living facility, and 3. Nursing home care, among other aspects of aging.  Approximately 70% of people over the age of 65 will need some form of long term care.
Estate & Business Law Group will help you create a long term care plan based on both your financial and personal needs and goals.  We want you to live with peace of mind, not with thoughts of fear and worries of becoming a burden on your family.  The key is to start planning now.
  • Power of Attorney
More than 90% of Americans have no plan for unexpected disability.  Before we become incapable of making our own legal, financial, and healthcare decisions, we should appoint a trusted person to make those decisions for us when such time comes.  If we do not, upon disability, the court appoints that decision-maker. 
Estate & Business Law Group can guide you through the Power of Attorney process – from defining and explaining the different types of powers to drafting and implementing the paperwork.  We want you to be secure in knowing that your needs will be met and that your wishes will be protected and carried out. 

Our estate plans include:
  • Advance Health Care Directives
  • Durable Financial Power of Attorney
  • Durable Power of Attorney for Healthcare
  • Pour-over Will
  • HIPAA Authorization
  • Out-of-state Directives
What is a Healthcare Power of Attorney?
What is a Living Will?
Which Healthcare Directive should I have?
Are there any other healthcare issues to consider?
What is HIPAA and how does it affect me? 
What is a Power of Attorney?
What if I want my agent to act for me even if I become disabled?
Are there any problems associated with Powers of Attorney?
How do I choose who will take care of my children if something happens to me?
What are the duties of a guardian?
How do I choose a guardian?
How do I nominate and replace a guardian?
Is it important to name a Successor Trustee?
What are the duties and responsibilities of a Successor Trustee?
Who can I select to be a Successor Trustee?
What are the advantages and disadvantages of selecting a family member or friend as Successor Trustee?
What are the advantages and disadvantages of selecting an attorney, CPA, or financial advisor as Successor Trustee?
What are the advantages and disadvantages of selecting a corporate Successor Trustee?
How can a trustee be replaced?
Should more than one Successor Trustee be named?

In this era of financial insecurity and economic crisis, it is our belief that safeguarding your assets from unnecessary loss has become an urgent priority for you and your family.

On February 8, 2006, President Bush signed into law the Deficit Reduction Act of 2005 (DRA 2005), which included the most sweeping changes to Medicaid laws ever enacted.

Some of the more significant changes that may impact you, should long term care become necessary are:

  • Change in the “look-back period” for transfers of property (now 5 years!);

  • Change in the penalty period for even inadvertent transfers of property;

  • New restrictions placed on the use of annuities, trusts and promissory notes.

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CS = Community Spouse:
The Spouse of an institutionalized individual and who does not reside in an institution.

IS = Institutionalized Spouse:
The spouse that resides in an institution and is receiving chronic care (not custodial).

MA = Medicaid Applicant:
Individual applying for Medicaid.

MR = Medicaid Recipient:
Individual qualified for and who is receiving Medicaid benefits.

Individual Resource Allowance:
The amount of resources (assets) the Medicaid Applicant can retain and still be eligible for Medicaid benefits.

CSRA = Community Spouse Resource Allowance:
Minimum and Maximum amount of resources (assets) the community spouse is entitled to retain and have the institutionalized spouse be eligible for Medicaid benefits.

MMMNA = Minimum Monthly Maintenance Needs Allowance (“Triple M N A”):
The minimum amount of income per month a “Community Spouse” is entitled to retain prior to being required to contribute toward the “institutional spouse’s” cost of care.

Lookback Date:
The first day of the month in which a MA resides in a health care facility and applies for Medicaid benefits. (Can apply for benefits retroactively 3 months.)

Lookback Period:
The period of time Medicaid will look at all financial records of a MA. The Look Back Period begins on the Look Back Date.

Spend Down:
The method or process of transferring (or spending) MA’s income or assets to get applicant and/or community spouse to Medicaid qualifying levels.

Compensated Transfer:
A transfer or spending of MA or CS income or assets and MA receives something of equal value in return.

Uncompensated Transfer:
A transfer or spending of MA or CS income or assets and MA receives no value, or less than the value transferred in return.

Penalty Period:
The number of months an MA is ineligible for Medicaid benefits because of an uncompensated transfer.

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What is a Power of Attorney?

In a Power of Attorney you, “the principal,” name a chosen “agent” to exercise legal authority on your behalf the same as if you were doing it yourself. The authority granted can be whatever rights you desire the agent to exercise over your legal affairs and your property. Such authority can include making deposits and withdrawals from your bank accounts, managing your investments, selling your home, or anything else you could do yourself.

Typically such Powers of Attorney take legal effect immediately. Also, the legal authority granted the agent in all Powers of Attorney terminates at the principal’s death and usually also terminates if the principal becomes mentally disabled.

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What if I want my agent to act for me even if I become disabled?

As stated above, the legal authority granted your agent to act for you in most Powers of Attorney automatically terminates if you become mentally disabled; thus a Power of Attorney can become useless exactly when it is needed the most. For this reason, many Powers of Attorney contain language that makes them “durable” so that the legal authority granted the agent continues even if the principal becomes disabled.

With a Durable Power of Attorney, your agent will continue to have the legal authority to make decisions for you regardless of any subsequent illness, accident or other disabling condition you suffer.

The granting of such legal authority to others is one way that an individual can avoid otherwise necessary guardianship court proceedings. The ability of the family to prevent court proceedings by having a Powers of Attorney in place, and the relatively low cost in having an attorney draft one, makes Powers of Attorney a popular estate planning tool.

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Are there any problems associated with Powers of Attorney?

Although Powers of Attorney may be inexpensive to set up initially, they tend to suffer from a number of shortcomings. First, if you believe that an important element of estate planning is to maintain control of your property while you are alive and well, the traditional Power of Attorney might not be acceptable to you because most Powers of Attorney give the agent immediate legal power to act on your behalf even though you neither presently need nor want any help.

This shortcoming can be avoided by using a “Springing” Power of Attorney. Unlike most Powers of Attorney that give the agent the right to act for you immediately, a Springing Power of Attorney allows the agent to act for you only after you become disabled.

Second, even the best Power of Attorney may not work just when you need it the most – when you become disabled and can no longer legally make your own financial decisions. This shortcoming occurs with great frequency because many banks and other financial institutions are extremely rigid and will accept only their own in-house Power of Attorney. They simply refuse to accept a Power of Attorney drafted by anyone other than their own attorney.
Moreover, just the mere passage of time from the date you sign your Power of Attorney until the time it is used by your agent, may be enough to cause problems. Financial institutions are often concerned that the passage of time has rendered your Power of Attorney “stale.” An old Power of Attorney runs the risk of becoming stale due to the possibility that many things may have changed in your life since you signed it and the Power no longer truly reflects your present desires.

Rather than risk a lawsuit by honoring a stale Power of Attorney, the financial institution may require a court to establish the validity of the Power of Attorney. Although in most circumstances your agent will win in court, your family will have lost because the whole point of having a Power of Attorney was to avoid a trip to the courthouse in the first place. This problem with “stale” Powers of Attorney is why it is sound advice to update them every couple years, or even more often.

A third shortcoming of Financial Powers of Attorney often arises when not enough legal authority is granted the agent. For example, the typical Power of Attorney gives your agent control over all your assets, including the right to sell your real estate but the document is entirely silent about the agent’s legal ability to use the proceeds of that sale for your benefit.

It is important to leave detailed instructions about how the proceeds from the sale of your property are to be used if you are disabled. Are such proceeds to be used only for your own benefit?
Or alternately, is your agent authorized to also use them to take care of others that you are currently helping, such as aging parents or your minor or adult children who may find themselves in financial or medical difficulties? While such instructions in a Power of Attorney give needed authority to your agent, they simultaneously contribute to the difficulty of getting a financial institution or other third party to honor it.

Conversely, a fourth shortcoming of Financial Powers of Attorney is the danger of giving the agent too much legal authority. Unfortunately, the legal treatises are full of instances where agents used their power to wrongfully abscond with all of the principal’s property.

For all of the above reasons, although Powers of Attorney offer valuable estate-planning opportunities, they also embody several significant shortcomings. Foremost among these is that they dangerously grant the agent broad legal authority over the principal’s property with little in the way of detailed instructions or restrictions to prevent the abuse of that power. The reality is that many times Powers of Attorney are used in an attempt to accomplish more than is wise or prudent.

Fortunately, there is a ready solution to this dilemma. Instead of using Powers of Attorney to grant an agent legal authority to do everything imaginable, a much better approach is to use a Power of Attorney that grants only limited authority in conjunction with a comprehensive estate plan that has at its center a Revocable Living Trust.
Powers of Attorney created for limited and specific purposes can be of great value in estate planning when used with a Revocable Living Trust. For example, as the estate planning centerpiece, the Revocable Living Trust will accomplish what it is expressly designed to do – help the estate escape guardianship proceedings while also providing the Trustee with detailed instructions that authorize only appropriate use of trust funds to help you and your loved ones and no one else.

The Power of Attorney then supplements this authority by authorizing the agent to handle any property or legal issue not controlled by the trust. Such legal issues could include representing you if you become injured in an automobile accident, advocating for you before government agencies, and dealing with insurance or retirement account issues. Other limited powers could include the authority to transfer assets to your trust but not give them away. Using a Revocable Living Trust with a Power of Attorney, you will be more secure in the knowledge that the instructions you leave will actually work as you intend without court intervention or the risk of being victimized by an unscrupulous agent.

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What is a Healthcare Power of Attorney?

All states have laws that authorize you to create a special Power of Attorney in which you designate an agent to make health care decisions for you if you are unable to do so yourself. These Healthcare Powers of Attorney can also be used to provide instructions to your agent concerning the type of care you do or do not want to receive if disabled, seriously ill, or injured.

It is important to get professional advice when preparing a Healthcare Power of Attorney because each state has its own requirements for how the document is to be signed, how many agents may be used at any given time, and restrictions on the types of medical decisions that may or may not be made by an agent. Also, because the person you appoint as your healthcare agent could literally have life and death decision-making authority over you, selection of an agent should be done with the utmost care.

The person you select for your health care agent should be someone who not only knows you well, but also understands your views about continuing health care in circumstances where you are terminally ill or suffering from a permanent loss of consciousness. Remember, these are decisions of the heart and don’t necessarily require the same financial skills you might want to see in a trustee. In fact, the person who is the best with a dollar may be the very last person you would want making these life and death decisions for you.

Your spouse, other family members, or close friends are usually good candidates to be the health care agent. But whomever you chose, it is important that you thoroughly discuss with your agent your desires concerning whether you should receive or refuse healthcare services under various situations.

Your estate planning attorney should be able to provide you with a list of questions that address these issues to go over with your intended healthcare agent.

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What is a Living Will?

In addition to statutes authorizing you to appoint a healthcare agent, most states have statutes that authorize you to leave instructions concerning the specific types of treatments you do or do not want to receive. These instructions are generically known as “Living Wills,” and in some states known by their more technical legal definition, “Declarations To Physicians.”

Living Wills, in essence, are intended to provide you with a way to express in advance your desires concerning your health care treatment. They are mainly used by those who desire to authorize the withdrawal of life sustaining care if their treating physician’s medical diagnosis is that continuing healthcare is simply prolonging their life without hope of meaningful recovery. Living Wills can also be used equally well to provide instructions about the types of medical treatment the patient does not want withheld or withdrawn.

Ordinarily, Living Wills require the agreement of two physicians that the conditions you have set to withdraw care have occurred. For example, before they could “pull the plug”, two physicians would have to agree that you are suffering from a terminal condition or that you are in a “persistent vegetative state.”

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Which Healthcare Directive Should I Have?

Recently, there has been a good deal of concern that health professionals frequently do not follow the directives contained in Living Wills because either the healthcare professionals did not know the patient had a Living Will or because the patient’s instructions were ignored under a “doctor knows best” philosophy. Also, in most states the care instructions provided in a Healthcare Power of Attorney override the instructions left in a Living Will if the two conflict with each other.

For these reasons, many estate planners recommend that the primary healthcare directive be the appointment of a specific healthcare agent in a Healthcare Power of Attorney. A handpicked agent serving as your healthcare advocate could make the difference between whether your healthcare instructions will be followed or not.

On the other hand, some estate planners argue that also having a Living Will in place can provide needed instructions if your healthcare agent, for any reason, is unable to serve. This is usually not a problem because of your ability to appoint successor healthcare agents if the first one named does not serve. Ultimately, the decision whether to have one or both documents is an important issue to discuss with your estate planning attorney.

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Are there any other healthcare issues to consider?

Many of our clients spend portions of the year in different states. If you live part-time in another state you may wish to have your healthcare directives prepared in each of your states of residence. Health care directives are mostly state specific. If you desire to have your wishes carried out no matter where you are if you become ill or injured, it is advisable to have a healthcare directive that complies with the law of all states where you reside a significant portion of the year.

Also, it is important to let others know that you have healthcare directives. Once prepared and signed, you should give copies of your healthcare directives to your chosen agents as well as your family physician. There are also professional services, such as Docubank or U.S. Living Will Registry, that offer twenty-four hour worldwide faxing of your healthcare directives with only a phone call. Your estate planning attorney can help arrange for these services if desired.

You should also ask your estate planning attorney if there are any other unusual provisions in your state’s laws of which you should be made aware. For example, in some states you may be able to obtain a “do not resuscitate” bracelet that instructs paramedics and other healthcare professionals that you do not want to receive resuscitation services if you cannot communicate that desire yourself.

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What is HIPAA and How Does It Affect Me?

Congress enacted the Health Insurance Portability and Accountability Act of 1996 (HIPAA) to protect your healthcare information. The primary objective is to ensure the electronic transmission of health care information between insurance companies remains private. A consequence of these strict privacy rules is that your healthcare provider may be prevented from sharing healthcare information with your loved ones.

HIPAA imposes significant penalties on health care providers who release your information without proper authorization. To avoid a situation where your family is unable to obtain necessary healthcare information when an emergency arises, it is imperative that you have a Healthcare Power of Attorney.

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How do I choose who will take care of my children if something happens to me?

In planning for children there are two main questions that one must ask. The first question is, “Who will take care of my children’s physical needs?” This is the role of a Guardian. The second question is, “Who will be responsible for managing the children’s inheritance until they are mature enough to manage it themselves?” This is the role of a Trustee. While the roles of a guardian and a trustee are both important, they require different skills. In order to pick the right person for the right job, it is important to know the duties each performs.

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What are the duties of a Guardian?

A guardian is responsible for caring for the physical needs of minor children, or adults who are disabled. They make decisions involving basic needs such as housing, clothing, medical care, and schooling. For minors, the Guardian is the person who will tuck your child in at night. For disabled adults, the Guardian is the person who decides if they can be cared for at home or if their condition requires placement in a group home, assisted living facility or nursing home.

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How do I choose a Guardian?

Choosing a guardian for minors is perhaps the most difficult decision a parent has to make because it is nearly impossible to imagine anyone else doing as good a job as you would do raising your children, however, as pointed out earlier, if you do not choose a guardian for your children, a judge who has no personal knowledge of you or your children will decide who will raise them. Don’t allow yourself to become paralyzed trying to find someone who will be as good a parent as you are. That person does not exist. Instead, focus on finding the next best person available.

In choosing a guardian for minor children, it is important that you name someone who shares your ideas and values in rearing children. Ask yourself if you and the person you are considering share similar religious beliefs and attitudes toward parental discipline. Ask yourself if they will give your children the same loving care that you give them and will seek to provide them with the same educational opportunities that you would provide.

Another factor that must be considered is the proposed guardian’s age. A guardian must not be so young or old that they are unable to care for or cope with very young, adolescent, or teenage children. While age is an important consideration, a number of good candidates are often overlooked merely as a result of their age. Age may be a deciding factor among equally qualified candidates, but it should not automatically disqualify an otherwise appropriate selection.

Many young parents operate under the false assumption that a guardian must be their age or younger. Age has often been cited as a reason not to nominate grandparents or others as guardians but a healthy, loving relationship that already exists between children and a potential guardian is the single most important factor to consider when choosing a guardian. If you believe your child would receive love, nurturing, and care from a particular person, that single factor might outweigh any negatives such as age or relocation. In many cultures, the older members of extended families often help to raise children. Moreover, grandparents who are overlooked might contest your appointment in court, especially if individuals from outside the family are named.

Also consider the proposed guardian’s ability to financially care for your children. If the guardian is not financially equipped to care for your children it may cause an undue burden on the guardian’s family and lead to resentment against your children. For this reason, it is wise to consider leaving financial assistance to the guardian to help raise your minor children or help provide for a disabled adult.

You should also consider whether you would want your child raised by a single parent or by a married couple. If you name a couple, you should clearly state what you would want to happen if there is a death or divorce between the guardians.

Another factor that should be considered in selecting guardians is whether they have children of their own. If they do, ask yourself whether their children will be good playmates for yours. Also ask whether parents who already have children of their own will be able to handle the additional burden, especially since your children may have emotional problems that will require a lot of individual care and attention. Because of these issues, you should not automatically rule out individuals whose children are already grown or who have no children. Sometimes a family with children may better serve as a support network in which all the children can remain friends rather than become sibling rivals.

All of the above issues should be thoroughly discussed with the proposed guardian in order to ensure that the person you select is qualified and to make sure he or she is willing and able to serve. Also, in addition to the primary person you would like to serve as Guardian, it is always a good idea to name a backup in case the first person selected is unable to serve. This person is known as a “successor guardian,” and can serve if you decide to replace the primary guardian or if the primary guardian is unable or refuses to serve when needed.

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How do I nominate and replace a guardian?

You may nominate a guardian for your children in your will. Wills are the legal tool used because the guardian appointment is officially made in probate court. For this reason, individuals who plan their estate with a living trust will also usually have a will drafted to nominate a guardian for their minor children.

Since guardians are nominated in a will, the nominated guardian can be replaced simply by signing a new will that nominates a new guardian. Accordingly, a guardian can be changed at any time prior to the disability or death of both parents. After the death of both parents, the guardian can be changed only by court order. Therefore, the appointment of a guardian should be reevaluated on a regular basis as your family needs change and the needs and circumstance of the nominated guardian change.

Once a parent has decided whom to appoint to take care of a child’s physical needs, it is next necessary to decide who will be responsible for managing the child’s inheritance until he or she is mature enough to manage it. As stated before, this is the responsibility of a Successor Trustee who starts managing the trust if the parent becomes disabled or dies.

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Is it important to name a Successor Trustee?

It is important to name a Successor Trustee to prevent the family from having to go through court proceedings to appoint a new Trustee if the Trustmaker is no longer able to serve due to disability or death. The Trustmaker should discuss the appointment with the person to be named so that person will be aware of the duties and responsibilities of a Successor Trustee when the Trustmaker can no longer serve.

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What are the duties and responsibilities of a Successor Trustee?

A Successor Trustee’s most important duty is to implement the Trust’s instructions concerning how the trust property should be used to aid the beneficiaries. Whereas guardians decide how to take care of a beneficiary’s physical needs, the Successor Trustee decides how to use trust assets to pay for those needs. Among other responsibilities, a Successor Trustee has the following responsibilities:

• Making an inventory of trust assets;

• Protecting trust assets and making sure they are properly invested;

• Preparing an accounting for beneficiaries;

• Implementing the Trust’s instructions as to how trust assets are to be distributed to the beneficiaries or otherwise used for their benefit.

The Successor Trustee need not make these decisions alone. The trust authorizes the Successor Trustee to obtain whatever professional services are necessary to carry out the trust’s instructions. Such professionals may include investment advisors, attorneys, insurance agents or certified public accountants.

Each state has statutory guidelines that regulate a trustee’s responsibilities. Trustees must use reasonable business judgment in the investment, management, and diversification of the trust assets, taking into account the needs of the beneficiaries. Additionally, trustees must not allow trust assets to be wasted or invest money or other property in speculative or other imprudent investments.

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Who can I select to be a Successor Trustee?

A Successor Trustee can be any adult. Possible candidates include family members or friends. Alternately, the services of a professional trustee can be retained. These include attorneys, certified public accountants, and trust companies or the trust department of a bank. Selection of a trustee is an important decision and each alternative has advantages and disadvantages.

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What are the advantages and disadvantages of selecting a family member or friend as Successor Trustee?

An advantage of selecting family members or friends as Successor Trustees is that they have personal knowledge of the family. Their knowledge of the true needs of the beneficiaries can prove valuable. They can also generally be trusted to act in the beneficiary’s best interest and usually will serve for little or no fee. The disadvantages of family members or friends serving as Successor Trustees is that they may make decisions on an emotional, rather than objective basis, and they often lack the financial skills necessary to invest and manage large sums of money.

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What are the advantages and disadvantages of selecting an attorney, CPA, or financial advisor as Successor Trustee?

Professional advisers, such as attorneys, CPAs, or financial advisers generally have expertise in finances and knowledge of the legal requirements of trust management. They also usually carry professional liability insurance that financially protects your beneficiaries if mismanagement of trust assets occurs. What professional trustees possess in financial and legal expertise they lack in knowledge of the Trustmaker’s family and goals and, with their professional skills come higher fees. Even so, higher fees should not necessarily be a determining factor in choosing a trustee. A professional’s fees are often more than compensated for by their ability to obtain for beneficiaries a better return on trust investments.

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What are the advantages and disadvantages of selecting a corporate Successor Trustee?

Trust companies or bank trust departments have substantial expertise in serving as trustees, are highly regulated by state and federal agencies, and have the financial resources to pay for costly mistakes. The disadvantages of corporate trustees serving as Successor Trustees, as with other professionals, include their higher fees, their lack of knowledge of the Trustmaker’s family, and the fact that they are often seen as uncaring and dispassionate. Including instructions in the trust that permit the trustee to be replaced if appropriate can mitigate some of these disadvantages.

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How can a trustee be replaced?

The Trustmaker of a revocable trust can change a trustee at any time prior to his or her disability or death by amending the trust to name a new Successor Trustee. The trust can also include instructions that outline the circumstances that allow a Successor Trustee to be removed. For example, the trust may provide that a majority of the beneficiaries can appoint a new Successor Trustee for specific reasons or for no reason at all. Also, there does not have to be just one Successor Trustee named. Multiple Successor Trustees may be named to serve simultaneously.

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Should more than one Successor Trustee be named?

The decision to choose more than one Successor Trustee to serve simultaneously may be based on several factors. Often one person possesses all the necessary skills to serve alone. If this is not the case, co-trustees can be appointed and trust responsibilities divided between them. For example, the Trustee that personally knows the beneficiaries the best can be assigned the responsibility of deciding when to distribute trust assets for their benefit. The Trustee that is most adept at financial matters can be assigned the responsibility for deciding how to invest trust assets. If co-trustees are appointed, the trust agreement should state the specific responsibilities of each Trustee and how joint decisions are to be made.

Another benefit of naming multiple co-trustees is that if one of them resigns, becomes disabled, or dies, the other co-trustee is already in place to continue the trust administration without any interruption. Without this protection, the beneficiaries must deal with the burden of deciding whom to appoint as a Successor Trustee.

A final benefit of naming co-trustees is that they can monitor each other so that trust assets are managed and distributed as the Trustmaker intended. Many believe that it is simply good policy to make sure that multiple individuals are jointly responsible for the trust’s administration as it can help prevent the mismanagement, misuse, or theft of the trust’s assets.

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