Although we may not always recognize it, financial decisions and tasks are a part of our everyday lives. They range from daily spending habits to more complex retirement planning.

You may take for granted that you are able to manage your finances. However, what if you become incapacitated (meaning that you lack the ability to handle your own affairs due to illness, injury, cognitive decline, or some other cause)? Someone else will have to manage your finances for you if you cannot.

If you have an updated estate plan that names a substitute decision-maker to act in your stead, you have control over who that someone is. Otherwise, the court will appoint a financial decision-maker, and it may not be who you would want—or who has your best interests in mind.

Guardianship or Conservatorship versus an Estate Plan

Two-thirds of US adults do not have an estate plan,[1] which effectively means that they lack an incapacity plan (a plan for how their affairs will be managed if they cannot do it for themselves).

You may have created a will and completed other estate planning tasks, such as purchasing life insurance and making beneficiary designations. However, you still need a documented, legally enforceable process and plan for determining who will manage your affairs if you become incapacitated.

To proactively grant the necessary powers to a financial decision-maker, consider a revocable living trust and a financial power of attorney.

• A revocable living trust allows you to serve as trustee of the trust (in charge of managing the money and property owned by the trust) while you are still able. You can also name a successor trustee to take over trust management if you pass away or become incapacitated. The trust agreement can specify who determines whether you are incapacitated and can also contain detailed instructions about how the successor trustee should manage the trust.

One of the main purposes and benefits of a revocable living trust is to avoid the court-supervised probate process, but it can also be used to help avoid a different form of court intervention: the appointment of a legal guardian or conservator (the term may vary by state), which is the person appointed by the court to make financial and other decisions for you.

• A financial power of attorney is another estate planning tool that can help avoid court intervention if incapacity strikes you. It gives one person (the agent or attorney-in-fact) the authority to act on behalf of another person (the principal) regarding their financial matters.

A financial power of attorney is highly flexible. It can include a statement describing how incapacity will be determined and who determines it; it can come into effect only when the principal's incapacitation is confirmed (in some states); it can specify the powers granted to the agent; and it can be limited or long-lasting in duration. Like a revocable living trust, a financial power of attorney helps eliminate the need for court-appointed guardianship or conservatorship.

Factors When Choosing a Financial Decision-Maker

When choosing a financial decision-maker, you should consider factors such as trustworthiness, financial knowledge, and the ability to handle responsibilities under pressure. The person selected should have a strong understanding of your values and priorities, be organized, and communicate effectively with other key parties, such as family members or advisors. Additionally, they should be available and willing to serve in this role, as it may require significant time and effort, particularly during complex situations.

If nobody in your immediate circle of friends and family seems like a good candidate, a professional, such as an attorney or financial advisor, can be chosen. However, many professionals are hesitant about serving in the role of an agent under a durable power of attorney, so you may want to consider other professionals, such as professional caregivers or fiduciaries. A professional trustee or agent is different from a professional guardian or conservator because it is a person of your choosing rather than the court's.

The bottom line is that estate planning lets you manage incapacity in advance, in the manner that is best for you, your finances, and your family. You are free to name whomever you want to serve as a successor trustee or an agent under your financial power of attorney and to provide whatever instructions you want for them in your estate plan.

You may never need to rely on an incapacity plan. However, having the right people and provisions in place gives you added protection and peace of mind just in case something happens and you lose financial capacity. For guidance on this front, call us today at 336-373-9877 to set up an appointment.

[1] Rachel Lustbader, 2024 Wills and Estate Planning Study, Caring.com (July 30, 2024), https://www.caring.com/caregivers/estate-planning/wills-survey.

As a parent, you are responsible for the care of your minor child. In most circumstances, this means getting them up for school, making sure they are fed, and providing for other basic needs. However, what would happen if you and your child's other parent were unable to care for them?

It is important to note that if something were to happen to you, your child's other parent is most likely going to have full authority and custody of your child, unless there is some other reason why they would not have this authority. So in most cases, estate planning is going to help develop a plan for protecting your child in the event that neither parent is able to care for them.

What If You Die?

When it comes to planning for the unexpected, many parents are familiar with the concept of naming a guardian to take care of their minor children in the event both parents die. This is an important step toward ensuring that your child's future is secure.

Without an Estate Plan

If you and your child's other parent die without officially nominating a guardian to care for your child, a judge will have to make a guardianship decision. The judge will refer to state law, which will provide a list of people in order of priority who can be named as the child's guardian—usually family members. The judge will then have a short period of time to gather information and determine who will be entrusted to raise your child. Due to the time constraints and limited information, it is impossible for the judge to understand all of the nuances of your family circumstances. However, the judge will have to choose someone based on their best judgment. In the end, the judge may end up choosing someone you would never have wanted to raise your child to act as your child's guardian until they are 18 years old.

With an Estate Plan

By proactively planning, you can take back control and nominate the person you want to raise your child in the event you and the child's other parent are unable to care for them. Although you are only able to make a nomination, your choice can hold a great deal of weight when the judge has to decide on an appropriate guardian. The most common place for parents to make this nomination is in their last will and testament. This document becomes effective at your death and also explains your wishes about what will happen to your accounts and property. Depending on your state law, there may be another way to nominate a guardian. Some states recognize a separate document in which you can nominate a guardian, and that document is then referenced in your will. Some people prefer this approach because it is easier to change the separate document as opposed to changing your will if you want to choose a different guardian or backup guardians.

What If You Are Alive but Cannot Manage Your Own Affairs?

Although most of the emphasis is on naming a guardian for when both parents are dead, there may be instances in which you need someone to have the authority to make decisions for your child while you are alive but unable to make them yourself.

Without an Estate Plan

Not having an incapacity plan in place that includes guardianship nominations means that a judge will have to make this judgment call on their own with no input from you (similar to the determination of a guardian if you die without a plan in place).

With an Estate Plan

A comprehensive estate plan can also include a nomination of a guardian in the event you and the child's other parent are incapacitated (unable to manage your own affairs). Although you are technically alive, if you cannot manage your own affairs, there is no way that you will be able to care for your minor child. This is another reason why having a separate document for nominating a guardian (as described above) may be preferable to nominating guardians directly in a last will and testament. Because a last will and testament is only effective at your death, a nomination for a guardian in your will may not be effective when you are still living. However, a nomination in a separate document that anticipates the possibility that you may be alive and unable to care for your child can provide great assistance to the judge when evaluating a guardian. Depending on the nature of your incapacity, this guardian may only be needed temporarily, with you assuming full responsibility for your child upon regaining the ability to make decisions for yourself.

What If You Are Just Out of Town?

Sometimes, you travel without your child and will have to leave them in the care of someone temporarily. While you of course hope that nothing will go wrong while you are away, it is better to be safe than sorry.

Without an Estate Plan

Without the proper documentation, there may be delays in caring for your child if your child were to get hurt or need permission for a school event while you are out of town. The hospital or school may try to reach you by phone in order to get your permission to treat them or allow them to attend a school event. Depending on the nature of your trip, getting a hold of you may not be easy (e.g., if you are on a cruise ship with little access to phone or email). Ultimately, your child will likely be treated medically, but the chosen caregiver may encounter additional roadblocks trying to obtain medical services for your child, and they may not be able to make critical medical decisions when needed.

With an Estate Plan

Most states recognize a document that allows you to delegate your authority to make decisions on behalf of your child to another person during your lifetime. You still maintain the ability to make decisions for your child, but you empower another person to have this authority in the event you are out of town or cannot get to the hospital immediately. This document allows your chosen caregiver to make most decisions on behalf of your child, except for consenting to the adoption or marriage of your child. The name of this document will vary depending on your state and is usually effective for six months to a year, subject to state law. Because this document is only effective for a certain period of time, it is important that you touch base with us to have new documents prepared so that your child is always protected.

We Are Here to Protect You and Your Children

Being a parent is a full-time job. We want to make sure that regardless of what life throws at you, you and your child are cared for. Give us a call to learn more about how we can ensure that the right people are making decisions for your child when you cannot.

What is Probate?

Probate is the court-supervised process of either (a) carrying out the instructions laid out in the deceased's will or (b) applying state law to distribute a deceased's accounts and property to their family members if the deceased did not have a will. The main purpose of the probate process is to distribute the deceased's money and property in accordance with the will or state law. Not all wills, and not all accounts and property, need to go through probate court. And just because a will is filed with the probate court does not mean a probate needs to be opened. But whether or not probate is necessary, most state laws require that a will be filed when the creator of the will (testator) passes away.

Understanding Probate, Wills, and Estates

Estates, wills, and probate are distinct, yet interrelated, estate planning concepts.

• An estate consists of everything that a person owns—including their personal possessions, real estate, financial accounts, and insurance policies. Virtually everyone leaves an estate when they die.
• A will is the legally valid written instructions that a person creates describing how they want their money and property distributed upon their death. Wills are highly recommended, but there is no legal requirement to have one. To make a will legally valid, it must be properly executed in accordance with state law. Executing a will involves signing the document in front of witnesses. Additionally, at the time of signing, the creator must have capacity (i.e., be of sound mind).
• Probate is the legal process that formally distributes the accounts and property that are in the decedent's sole name, do not have a beneficiary designated, and have not been placed into a living trust prior to the decedent's death (sometimes referred to as probate assets). During probate, a decedent's probate assets are identified and gathered, their debts are paid, and the probate assets are distributed to beneficiaries named in the will or their heirs as determined by state statute if there was no will.

Probate with a Will

Assuming that a decedent does have a will, here is how probate typically proceeds:

• The person nominated in the will to act as executor (sometimes called the personal representative) files a copy of the death certificate, the original will, and any required documents or pleadings with the probate court. If the person nominated in the will does not file these documents with the court, state statute will determine who else has priority to make such filings (possibly another family member, an attorney, or even a creditor of the decedent).
• The court examines the will and other documents filed to confirm their validity and gives the named executor the legal authority to carry out the decedent's wishes, as specified in their will. This legal authority is conferred in a court-issued document called letters of authority, letters testamentary, letters of administration, or another similar name.
• The individual appointed as executor inventories and values the decedent's estate assets and identifies any outstanding debts of the estate, such as loans and credit card debt.
• Once estate debts are paid, the remaining accounts and property are distributed to named beneficiaries and the estate is closed, ending the probate process.

The length of a probate can vary depending on many factors, including the size of the estate, state laws, and whether the will is deemed invalid or contested.

Avoiding Probate

In some cases, avoiding probate altogether can cut down on the amount of time it takes to wind up a deceased person's affairs. There are also other reasons to avoid probate, such as keeping probate filings out of the public record and saving money on court costs and filing fees.

Beneficiary designations, joint ownership, trusts, and affidavits are common ways to avoid probate, but only if they are done correctly. Here are some examples of these probate-avoidance tools in action:

• Pensions, retirement accounts like 401(k)s, and other accounts that allow for designated beneficiaries may not need to be probated. Transfer-on-death (TOD) and payable-on-death (POD) accounts are generally treated the same as accounts that have a beneficiary designation. However, you should never name a person who receives Medicaid or SSI, or a minor child, as a beneficiary or TOD/POD designee.
• Accounts and property that are jointly owned and have a right of survivorship can bypass probate.
• Accounts or property held in a trust may also bypass probate. But trusts are not without administrative and cost burdens. Also, if the deceased forgot to transfer ownership of an account or piece of property to the trust, a pour-over will may be needed to transfer those accounts and property to the trust through the probate process upon the trustmaker's death.
• Some states have laws that allow probate to be skipped if the value of an estate is below a specified value and does not contain any real estate (often referred to as a small-estate exception). The threshold value for qualifying for this exception varies by state. For example, probate can be skipped in Arizona, Texas, and Florida for estates worth less than $75,000. In California, the threshold is $184,500; in New York, it is $30,000.

Filing a Will versus Opening Probate

Filing a will with the probate court and opening probate are separate actions. A will can be filed whether or not probate is needed. Remember that probate is needed only under certain circumstances, such as when the decedent passed away while owning probate assets. Further, not only can a will be filed with the court when a probate is not needed, some state laws actually require it. Some state laws require the person who has possession of a decedent's will to file it with the court within a reasonable time or a specified time after the date of the decedent's death. The consequences for failing to file a will vary by state but may include being held in contempt of court or payment of fines. Additionally, the person in possession of a will might also be subject to litigation by heirs who stand to benefit from the estate under the terms of the will. The latter also applies if the will-holder files a will but does not file for probate. Failing to file for probate (when probate is necessary) prevents inheritances from being properly distributed.

These legal consequences are usually imposed only on a will-holder who willfully refuses to file a will. If someone you love has passed away and you have their will in your possession, we recommend that you work with an experienced probate attorney who can assist you in determining whether a probate must be opened and whether the will needs to be filed.

Avoid Probate Issues When Drafting a Will

Probate avoidance may be one of your goals when creating an estate plan. You should also consider implementing tools in your estate plan to minimize issues that may arise if your estate does require probate.

Your will may have been written years ago and might not reflect current circumstances. You could have acquired significant new accounts or property, experienced a birth or death in the family, left instructions that are vague or generic, or chosen an executor who is no longer fit to serve. An outdated or unclear will can spell trouble when it is time to probate your estate, making it important to identify—and address—issues that could lead to problems, including will contests and disputes.

It is recommended that you update and review your estate plan every three to five years or whenever there is a significant life change or a change in federal or state law. You cannot be too careful when stating your final wishes. For help drafting an airtight will that avoids possible complications, please contact us.

Backup Plans Are Loving Too: Why You Need Contingent Agents and Guardians

Progressive Insurance recently rolled out a series of commercials featuring “backup” quarterbacks stepping in to handle everyday challenges, such as ordering food, giving advice, and even parking a trailer. After the “backup” salvages the situation, each commercial ends with the same line: “If only there were backups in real life.”

The ads are designed to emphasize how a backup can provide peace of mind when the unexpected occurs, as it often does, in both football and life. Progressive frames the point simply: “It’s always a good idea to have a backup plan.”

The humor hinges on the premise’s absurdity. In most areas of life, a person cannot summon a backup to act on their behalf during a deeply personal moment and expect that substitute to seamlessly complete the task.

Estate planning represents a notable exception. Real-life backups are contingent decision-makers designated in advance to step in if a primary decision-maker cannot serve. These contingents function much like backup quarterbacks: prepared to act quickly, often under pressure, and sometimes when the stakes are high.

An estate plan that names only primary decision-makers may appear complete on paper. Without contingents, however, the plan lacks the depth needed to remain effective when circumstances change, much like a football team without a backup quarterback.

Backups Prevent Chaos
When a team has no backup quarterback, it risks losing its entire passing game the moment the starter goes down. In desperation, coaches may be forced to put a nonquarterback under center to keep the game moving, with predictably disastrous results.

After a high-profile game exposed this exact problem, the National Football League changed its rules,[1] adopting an “emergency quarterback” policy to ensure that, even in extreme circumstances, a team would not be left without an on-field quarterback.

The logic is structural rather than sentimental: the quarterback is a control point for the entire strategy, and the system quickly falls apart when no prepared backup exists to take over.

The same dynamic exists in estate planning. When a plan relies on a single decision-maker with no designated contingency, it creates a fragile structure—one illness, conflict, relocation, or instance of unavailability away from confusion, delay, or court involvement.

Contingents provide stabilization and strategic depth. They allow your estate plan to keep functioning even when life goes off script.

Fielding the Right Team in an Estate Plan
Backups are not expected to completely fill the starter’s shoes. If they could, they would be starting. However, they are expected to be part of the game plan so that, if they are needed, the drop-off is manageable and the system can continue to operate.

That is an excellent way to think about contingents in an estate plan. Their role is not perfection but continuity.

When backup decision-makers are not built in, all bets are off. Decisions stall. Authority becomes unclear. Courts or third parties may be forced to step in. And unlike football, where the fallout affects both players and fans, the real-world consequences land on family members, often during moments of stress, grief, or medical crisis.

Just as damaging as having no backup is having the wrong one. Naming someone who is unavailable, unprepared, or no longer appropriate can be the equivalent of signing a player off the street and hoping for the best. The position may be filled, but the drop-off is glaring, and the system will not function as intended.

Common Contingent Oversights and the Problems They Cause
Contingents, like backup quarterbacks, are best viewed as necessary additions to your decision-making team. Whether on the field or in real life, things rarely go exactly as planned. Not having the right backups in place can cause an otherwise well-drafted estate plan to quickly break down, sometimes at the worst possible moment.

Financial Power of Attorney

●        Only one agent has been named, with no contingent agent.

●        A contingent agent was named years ago and may no longer be an appropriate choice.

●        Coagents are named without clear instructions on authority (for example, whether they must act jointly or may act independently, and how disagreements are to be resolved).

Result: Financial decisions stall, accounts freeze, and families may be forced to go to court.

Healthcare Agent

●        Only one health care agent has been named, with no alternate.

●        The named agent may be unavailable (out of state, difficult to reach, or unable to respond quickly during a medical event).

●        The agent’s current views may no longer align with the client’s wishes (or the client’s wishes have evolved and have not been clearly communicated).

Result: Treatment decisions may be delayed, authority can become unclear, and family conflict often escalates during medical crises.

Executor or Personal Representative

●        No alternate executor has been named.

●        The named executor is unwilling or unable to serve.

●        The named executor lacks capacity or lives far away, limiting availability for time-sensitive tasks.

Result: Probate is delayed, costs increase, and court involvement becomes more likely at a sensitive time.

Guardians for Minor Children

●        A guardian has been named for one child but not for others.

●        No backup guardian has been named.

●        The named guardian’s circumstances have materially changed (health, location, family responsibilities, or financial stability).

Result: Courts must decide custody and identify backup choices without knowing the parents’ wishes.

Across all these roles, the pattern is the same. Change was unanticipated, and the plan failed as a result. Depth was never built into the system. Or if it was, it was the wrong kind of depth. The listed backup was not read into the game plan or in “playing shape.” They had not had sufficient practice to be game-ready.

Backups Are a Sign of Readiness
Nobody would accuse a team with a solid backup quarterback of being pessimistic or overly worrisome. Backups are standard procedure because the position carries high stakes, and the consequences of being unprepared are immediate.

Estate plans work the same way. Naming backups (successor trustees, alternate personal representatives, backup agents under powers of attorney, and contingent guardians) is not “expecting the worst.” It is smart redundancy: an added layer of protection that helps your plan hold up when life does not cooperate. And, just as with a team’s lineup order, those choices should be revisited and updated during regular plan reviews.

Teams do not hesitate to replace a backup when the fit is wrong for the system or the locker room, and you should not hesitate either. Sometimes the person you picked years ago has moved, become unavailable, changed in capacity, or is simply not the best match for what your family needs today.

In real life, just as in football, you sometimes need someone ready to step in when life does not go according to plan.

However you look at it, your backups are every bit as important as the starters in your estate plan and require a specific skill set—and preparation—to succeed when they are called.

Do you need to name backups or help choosing the right contingents? We are here to assist you in doing just that!

[1] NFL emergency third-quarterback rule: Questions and answers, NFL (Sept. 4, 2023), https://www.nfl.com/news/nfl-emergency-third-quarterback-rule-questions-and-answers.