A recent column emphasized the importance of ensuring that alternate trustees, executors, and attorneys are named in your estate planning documents in case your first appointed personal representative refuses to act when the time comes. Having your trust or will would allow the appointment of a professional trustee or bank trust service would ensure that there would be someone who would step in and look after your estate if your trustee or executor lack.

I have received the following feedback from a seasoned trust professional who works with one of our “big bank” trust departments:

Quick PS on a Great Column: Advise clients to make sure their trust estate meets the minimums for a corporate trustee, which are typically higher than many clients imagine. If the Office of the Public Guardian is involved, the estate is probably not large enough for a bank. And, if the bank does not have an existing relationship with a deceased person, the minimum is even higher. It is always a good idea to let the bank know in advance and to confirm that they will act as a trustee when the time comes.

In addition, most corporate trustees will not appoint a successor institution or private trustee if they decline the appointment, even if the document grants them this power.

Thanks to the anonymous trusted professional for your comments! I had the exact experience when a family approached me to step in as a trustee when the nominated bank refused. The document made it clear that if the bank refused the trust, it had the power to appoint a professional trustee to act on its behalf. When we asked the bank why they didn’t want to make an appointment, they said they could be held accountable if I (or another trustee they appointed) didn’t do the job right! Although the family begged the bank to make the appointment, we ended up going to court to get the appointment. Frustrating and expensive!

Question: If I have an executor (and a second) appointed for my trust, do I still have to give someone a power of attorney? I do not understand the difference between these two roles and I would like some clarification. Also, should it be the same person (s)?

Reply: Let me first make a slight terminological correction: the person you appoint to act on your behalf in a trust is your successor trustee. The person you name in your will is an executor and the person you name in your power of attorney is an attorney. I’m sure the legal system is doing this sort of thing just to confuse us, but that’s a different column!

So, you have a trust and are wondering if you should always have a power of attorney document? Short answer: yes. If you become incapacitated, your trustee literally steps in your shoes to take on the legal, financial and tax responsibilities that you had before the incapacity. Companies like PG&E or your cell phone company aren’t interested in dealing with a trustee, they want to see a power of attorney document. They recognize and feel comfortable dealing with an attorney under a power of attorney. Yes, your Trustee and Agent can and should be the same person. Until your incapacity, you took care of all these matters, didn’t you? The goal is to have someone in your place to make sure that you and your estate are taken care of in the same way that you took care of them yourself.

Liza Horvath has over 30 years of estate planning and trust experience and is a Chartered Professional Trustee. Liza is currently President of Monterey Trust Management. This is not legal, tax or investment advice. If you have any questions, call (831) 646-5262 or email [email protected]


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