When it comes to decision making, some decisions may come out better if made by more than one person on the premise that “two heads are better than one”. On the other hand, if two or more people have equal authority over a matter and they don’t get along well or have different objectives, the decision making process could get real ugly.
When designating persons to handle ﬁnancial affairs or make medical decisions, some people want to have two people “in charge”. Such an arrangement is permissible under the law. When designating two persons to share authority, a person also needs to specify whether the two people may act independent of one another or whether they must act together (jointly). The following examples show each type of authority and how problems can arise.
Two sisters are named as independent co-agents on their widowed mother’s Advance Health Care Directive and are given power to make decisions regarding Mom’s health care. Mom is at the place in life where she has advanced dementia and needs constant physical help to perform her daily activities. Karen lives with Mom in Mom’s house, has no job and pays no rent. Her sister, Tammy, has a home of her own, is ﬁnancially independent, and is planning to move Mom to a residential care facility where she be cared for. Karen wants to continue to take care of Mom at home. Although she loves Mom, her primary motivation is to keep Mom’s house from being sold so she will continue to have a place to live. Because they are authorized to act independently of each other, Tammy could move Mom out on Monday and then Karen could move her back home on Tuesday! Which one will give in?
If two persons are designated to act jointly as co-agents, both have to be available and agree on every decision. If one is out of town or can’t be reached in an emergency, the absence could pose a serious problem. For example, two people are designated in a Power of Attorney or living trust to act jointly as co-agents over an incapacitated person’s ﬁnances. If they have a joint checking account, requiring both signatures on every check, a problem will develop if an immediate need for money arises while one agent is out of the country on vacation. If they can’t agree on a particular issue, that is also a problem if the issue cannot be resolved unless both agents agree.
I usually advise my clients to designate one agent to make decisions and designate at least one alternate agent who can act if the ﬁrst agent is not available to perform his or her duties. When clients tell me they want to have co-agents, the ﬁrst thing I ask is “do they get along”? Depending on the issues and the relationship of the proposed co-agents, I sometimes suggest that speciﬁc directions be set forth in the document regarding how the two agents will resolve any disagreements. I might also suggest that a third party be designated as a “tie-breaker”.
With forethought, the potential for “double trouble” can be minimized.
© 2018 by Marlene S. Cooper. All rights reserved.
(Marlene S. Cooper, a graduate of UCLA, has been an attorney for over 35 years. Her practice is focused entirely on estate planning, estate administration and probate. You may obtain further information at www.marlenecooperlaw. com, by e-mail at Marlene@ MarleneCooperLaw.com, by phone at (626) 791-7530 or toll free at (866) 702-7600. The information in this article is of a general nature and not intended as legal advice. Seek the advice of an attorney before acting or relying upon any information in this article).