What to Do with Those Documents

This time around I'm going to assume you've fully executed all those planning documents I harp on - you have, right? - and talk instead about what to do with them now.  So, let's say you've just executed your new will, even a revocable trust, and some durable powers of attorney and health care directives.  First, where's the best place for the originals?  Not surprisingly, my suggestion is to leave them right there where you signed them all - in your lawyer's office where they'll be placed in a secure vault or fireproof filing cabinet.  That way, you'll never have to worry about which drawer you put them in at home or where the key is to your safe deposit box.  And while the latter is certainly safe, the contents may not be readily accessible if you're gone and someone else is trying to get into the box.  How do we know these are real problems?  Because we always provide people with binders containing copies of their documents - and they frequently can't find those.  And once they've left us, we occasionally need to have their boxes drilled when no one can locate their keys.

But let's say you've overcome that hurdle and the question is who to give copies of the documents to.  Let's start with the easy one.  If you've executed a health care directive that designates one or more agents to make health care and medical decisions for you if you can't do it yourself, then make sure those folks have copies of the document in case they need to prove their authority in an emergency.  Of course, it's critical for your physicians also to have copies so they'll know who to contact (and how to do it) if that time comes.  Say also that you're having surgery performed at another facility, you'll want to make sure that one receives a copy, as well, when you arrive for your pre-op visit.  Finally, because we travel more than ever these days, it's a good idea to take a copy of that document with you on the road (like copies of your credit cards and passport), and I even keep a copy on my phone.

Alright, but what about the other important lifetime planning document - the durable power of attorney for legal and financial affairs?  It's my humble suggestion not to turn over copies of that one until the time comes for your agent actually to use it to do your business.  There are two reasons.  First, it's unusual for a financial or legal emergency to arise that would require your agent to act under the same kind of circumstances as for medical purposes; and second, a copy of that document is just as powerful as the original, so handing over even a copy is tantamount to giving someone your checkbook and hoping they'll do the right thing.  In all likelihood they will (or you wouldn't have named them as your agents in the first place); however, we've seen enough unfortunate situations over the years to know that financial stress can be a dangerous motivator.  You know how it goes - agents get in a bind themselves; figure they'll just take a temporary loan from, say, mom's or dad's surplus funds; then they can't stop doing so or can't afford to pay back what they've borrowed.  And that's just the most innocent scenario.  Unfortunately, we've seen downright abuse occur more than a few times that jeopardizes the financial security of [often] a senior family member.  Just be careful, that's all.

As for copies of the will and/or trust documents, that's another call you'll have to make.  On the one hand, people say they want to be as transparent as possible with their family members, so there are no surprises later on and everyone knows what to expect.  That's certainly a commendable viewpoint in principle, but it can lead to awkward, even negative, results in some cases - of which I'll mention a couple.  What if the parents decide to name one of the children as their "go to" agent for executor and trusteeship, and that creates jealousies or hurt feelings among the others?  What if mom and dad aren't treating all the children the same, perhaps because one needs more help than another, or what if one of the children isn't financially responsible and won't receive a share outright but will have that share held in trust for some additional period of time?  

These may all be perfectly valid decisions based on the family dynamics, but why cause potential damage to the family relationships before the time actually comes?  A carefully written letter left with those documents could convey the parents' thinking and there wouldn't be any harm done in the meantime.  Also, fully laying out the plan could cause hard feelings if subsequent events mean a change in those plans needs to be made.  Finally, putting all the financial resources on the table could sap the children's incentive to do their own things if they think they'll eventually be set for life no matter what they do for themselves.  Don't get me wrong, I'm not suggesting that the family be kept completely in the dark about everything until you're gone.  I'm only urging that thoughtful decisions be made about the communications, taking into account the potential consequences of this or that disclosure and when it's made.

And here's a novel thought if you're still wondering what to do about all this.  Maybe it would diffuse problems later on if you sat down with the primary beneficiaries and discussed some of the choices before you actually make them.  Then at least you may have better information to work with, you may get a better sense of what roles are most important to all the cast members, and you may be able to head off some of the problems before they rise to a troublesome level.