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By Liza Horvath


When Trustees and Health Care Agents Disagree


Like so much of estate planning and the law, it is not until disagreements or discord arise that certain problems are revealed. Such a hurdle is coming to light with regard to the intersection of a trustee’s duty and the authority of an appointed healthcare agent.


Let me expand: A trustee is named in your estate plans and will step in to manage your finances and property should you become incapable of doing so and then, upon your passing, will distribute your assets to beneficiaries. As such, the trustee may work with your money managers, legal and tax advisors, and will pay ongoing bills. Payments may include medical bills, insurance premiums and, if needed, the cost of in-home caregivers. Your healthcare agent is the person you nominate in an Advance Health Care Directive and who will speak on your behalf to doctors and health care providers if you are unable to speak for yourself. The healthcare agent interacts with your doctors and is also responsible for making decisions for where you will live – whether that is at home with caregivers, or in an assisted living home or skilled living facility.


In an ideal world, your trustee and agent are clear on your end-of-life care wishes, are in full agreement and work hand-in-hand to make sure you are receiving the proper care and that you are as happy and comfortable as possible. In this perfect world, your agent makes the medical and living decisions for you and your trustee pays the bills. Your trustee also continues to make sure your assets are wisely invested so you will have enough money to be comfortable for the rest of your life – whether that is at your home or in a facility.


But what happens if your trustee and healthcare agent disagree? Most seniors want to live at home and many have the financial means to remain at home with caregivers. What if you have told your trustee – over and over – about your wishes to remain at home but your healthcare agent believes you will be “better off” in facility?  The situation becomes further complicated if your healthcare agent is also the beneficiary of your trust and stands to inherit any remaining assets after you are gone. Living at home with caregivers is extremely expensive – facilities can be cheaper. Situations like these have the potential to devolve into a Machiavellian drama.


So, who has the authority? Your trustee knows that you want to be home and, with caregivers, believes you are happy and safe. Your agent loves you and states that you will be safer in a facility so she fires your caregivers and moves you to a facility. She then presents the bills to your trustee for payment. Additionally, your trustee then needs to tend to your now empty home and, presumably, begin to either distribute or liquidate your home’s contents. 


The problem here is that the healthcare agent’s authority trumps the trustee’s with regard to your physical wellbeing. That is – fairly – conclusive. If you have picked your healthcare agent as most of us do – because they know and love us, chances are they will do what is right for us and, truthfully, having someone who is a strong trustee run the “business end” of your estate plan and having a family member or close friend be your agent is really the best scenario. Just try and communicate your wishes very clearly to those who will be addressing your needs – should you be unable to address them yourself. As with most of life – it all boils down to clear and meaningful communication.

Liza Horvath has over 30 years experience in the estate planning and trust fields and is the president of Monterey Trust Management, a financial and trust management company. This is not intended to be legal or tax advice. If you have a questions call (831)646-5262 or email liza@montereytrust.com










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