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Monday, January 17, 2011

Can I make my caregiver my executor?

This recent question from a reader caught my attention. Whenever I see someone making an executor appointment that is a little bit out of the ordinary, I wonder about the testator's motivation. Why does this person want to appoint the caregiver? As always in law, the question is not whether the person can take certain steps, but whether he should take those steps.

The phrasing of the question leads me to believe that the caregiver is not a relative of the testator. A more logical executor appointment would be a spouse, child or other relative. Why are none of these people being appointed? To me, the motivation behind the question is very important.

It's quite possible that the testator doesn't have a spouse or children, and is choosing the caregiver as someone close, trusted and familiar. But what if the testator does have children but isn't appointing one of them because he or she doesn't trust them or is expecting disputes? If that's the case, is it really a good idea to put the caregiver into the middle of a family fight on the death of the parent? Does the caregiver have any special skills that would make him or her a particularly good executor, such as accounting skills, legal background, familiarity with taxes, etc?

Another possibility is that the caregiver has asked the testator to make him or her the executor. This would be a problem. It's beyond the duties of a caregiver to become involved in a person's financial and legal matters. I would be concerned about potential financial abuse.

If a person doesn't have a spouse or other family members who would make good executors, perhaps he or she should consider appointing a trust company. A trust company is a reliable, regulated, experienced, neutral executor.

If the testator's motivation is to give the caregiver a financial gift in gratitude for care and companionship provided, that can be done through a gift in the will. In fact, it's probably more of a gift to simply leave the caregiver a sum of money than to ask him or her to administer the estate.

In my experience, people who don't have wills also don't have Enduring Powers of Attorney and health-care directives. The problem of who to appoint is even more problematic for these documents than it is for the will. The caregiver is not a good choice for either of these appointments. Consider the possible conflicts.

With a power of attorney, it doesn't make sense to give a hired employee full access to all of the employer's bank accounts, home title, investments etc. Nor does it make sense for the paid person to decide the amount he or she is to be paid.

With a health-care directive, it is also a conflict for a person whose income depends on providing health care services to decide which health care services are needed.

In both cases, the relationship between the person and his or her caregiver would become very complicated. Who would actually be in charge?

Lest the caregivers reading this post think that I have a negative view of them, I'd like to say that I look into every executor appointment that seems, on the face of it, to be unusual. I would also wonder about the appointment of a neighbour or a recent acquaintance. In my line of work, I see each day how vulnerable seniors are taken advantage of financially. I don't specifically blame that on caregivers by any stretch of the imagination. I've seen seniors treated worse by their own children than by anyone else. But in each case, I think it's best that a senior making a will has the chance to talk through the choice of executor and be aware of pitfalls and options.

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