If you have Power of Attorney for an aging or ill parent, you know that you have very broad control of Mom or Dad’s money, health and welfare. You are using your personal discretion on how to manage their assets, attend to their health needs, accommodation, or other comforts.
The challenges for the POA are twofold: making sure that you are meeting your obligations under the laws that govern such conduct, and meeting the expectations of siblings, who are often beneficiaries of the estate. Satisfying the obligations at law is perhaps easier than satisfying other family members or people that influence them – spouses, for example.
Family members often have very different opinions on the appropriate way in which to spend money to support Dad or Mom’s needs – some would spend whatever it takes to keep them as comfortable as possible; others may be more concerned about containing expenses, and less concerned about comfort level .
Often the POA is also named as executor in the will, which can and often does create an interesting environment following the death of the parent.
This is when one or more of the beneficiaries may try to “level the playing field” with the executor; hyper-vigilant observance of the executor’s administration of the estate is a possible scenario, and one that can prove challenging. This is particularly troublesome in cases where the aggrieved party perceives that the executor received preferential personal financial consideration (which incidentally some do) while acting as attorney.
It is difficult enough for an executor to manage the technical requirements of an estate administration – valuing and liquidating household contents, managing financial investments, appraising, preparing and selling real estate – but managing communications in an environment of rivalry, resentment, anger and sometimes greed, all at the same time is a very tall order, indeed.
Executor liability insurance is an important consideration for every executor, but more so in the context of previous power of attorney, extended family groups, do-it-yourself wills, wills where some beneficiaries are treated differently, or even cases where no one knows what the provisions of the will actually are. It is low cost protection that helps manage the risks associated with family dynamics – where no one can predict what or whom might unexpectedly erupt.