There are three documents essential to an effective estate plan—your will, enduring power of attorney, and personal directive. Carefully appointing the roles of estate executor and trustee, attorney, and agent is critically important for effective estate planning, and ultimately, successful estate administration.

Your attorney: Managing your financial assets in the event of your mental incapacity

The considerations involved in selecting your representative, known as your attorney, are essentially the same as those for choosing your executor. If your enduring power of attorney, or EPA, is activated, the actions of your attorney can have a profound impact upon the nature and size of your estate.

Having co-attorneys

As is the case with your executor, but perhaps even more so, if you are appointing more than one person to act jointly as your co-attorneys, you want to ensure that they are willing and able to work together for your benefit.

If you are considering co-attorneys, you may be doing so either because of the skill set each brings to the relationship or because of a sense of obligation, such as feeling compelled to appoint all of your children. One often-overlooked element of having co-attorneys is that there is an increased likelihood of dispute. The likelihood of disputes increases as the number of co-attorneys increases.

In absence of a specific provision in your EPA, all attorneys must act unanimously. Given that an EPA could exist for years if there is a prolonged health event, it is imperative financially, as well as practically, that the attorneys can effectively make joint decisions.

If there is a possibility that the co-attorneys may fail to agree on a course of action, consider a majority rules provision or perhaps that an eldest child’s decision is final. Nonetheless, a word of caution; if there is a possibility of dispute, consider either a single attorney or appoint a trust company.

Location of your attorney

As is the case with your executor, for logistical reasons, it is generally not recommended to appoint someone who does not reside in the province of residence to be your attorney. Your attorney’s physical proximity to you can be quite important when it comes to making any number of routine decisions, and the closer your attorney is to you, the better.

Characteristics to look for in your attorney

As was the case with your executor, Marvin Toy and Jim Yih provide a great summary of characteristics to look for in an attorney in their book, Smart Tips for Estate Planning. In their opinion, a good attorney:

• Is willing and able to manage your assets to protect both you and your estate.
• Has, or is willing and able to make the time to manage your assets.
• Has experience in managing money, and, if applicable, corporate interests.
• Is comfortable dealing with lawyers and accountants.
• Is able to commit to potentially having to spend years managing your assets.
• Has the time and patience to communicate with the people who take care of you.

What are some other considerations regarding your attorney?

Given the similarity of the roles of attorney and executor, many of the considerations that apply to your choice of executor should also apply to your choice of attorney. Here are some examples:

• Your attorney should have a solid knowledge of your estate assets and estate beneficiaries. If you name the same person as your attorney as you named for your executor, then one informational disclosure will suffice. If two different people are chosen for the roles, then you want to be sure that they both have the same information about your estate.
• If you own an active business or farming operation, the attorney you choose should have good business acumen and a good working knowledge of your business or farming operations. You may want to direct them to work with any professional advisors you already have in place regarding your business.
• Your attorney does not have a legal obligation to provide regular reporting to anyone until your death, unless someone brings a valid court application for a report, so they should be good at record keeping. To keep your estate beneficiaries informed of the management of your assets, your EPA can include a provision that some form of regular reporting is provided by your attorney. You may also require your attorney to contact all of your family members, and/or anyone else that you specify, and let them know that your enduring power of attorney has been activated.
• Acting as your attorney can be very involved and may extend for years. Given this, including a provision for the fees to be paid to your attorney may be appropriate, particularly if the attorney is not a spouse or common-law partner. Including a fee provision within an EPA is rare, so your attorney would need to seek court approval for compensation or request compensation from the estate following your passing.

A letter of wishes: Assisting your attorney with their duties

A letter of wishes or letter of direction for your attorney is a very useful tool that provides non-binding guidance as to how you would like them to exercise their duties, if and when circumstances arise.

These letters can be particularly helpful for family members as they provide some explanation from you for your decisions, helping to resolve any disputes that could arise between them. Such letters can be changed as circumstances evolve and should be kept in the same place as you keep your other documents.

You also may want to have separate letters that would apply specifically to your will, enduring power of attorney, and personal directive. It is also a good idea to review them with the people you have chosen to fulfill the associated roles.

To avoid any misinterpretation that such memos replace a will, personal directive or enduring power of attorney, they should be identified as letters of wishes or directions to support the governing document.

The experts at ATB Wealth can help you develop your estate plan to ensure your wishes are carried out. Contact us today for more information.