Written by Robert T. Nickerson
Within the past week, a lot of the news cycles have covered the reaction to the death of Prince Philip, Queen Elizabeth’s long-time husband who recently passed at the age of 99. Some have felt a loss similar to a family member. Others have celebrated it. But regardless of how people saw him, losing a member of the royal family, whose been in the public eye for over seventy years, is a big deal. The next step is seeing what the royal family is going to do when he’s laid to rest.
It should come as no surprise, but Prince Philip had already presented his wishes on what was going to be done in the event of his death. This is also a requirement among state figures in England. As of April 13, 2021, the family is planning a small funeral with no public attendance allowed. This is quite the opposite of the situation involving Princess Diana back in 1997. Even though the circumstances surrounding their memorials are different, he wanted something more intimate than a large-scale event.
Being able to plan out your end of life wishes seems like something only available to royalty or super wealthy. The truth of the matter is that anyone can do. These terms can be legally bound within an estate plan document. This is what a health care directive can help accomplish. Along with funerals and memorial services, their also capable of stating which family member would be in charge of legal decisions and even the ability to terminate one’s life based on the medical issue.
But I bet your wondering; what is a health care directive? It’s a legal contract that names a person (typically a close family member or friend) to make decisions in your name should you not be able to (like if you slipped into a coma or became a vegetable). Upon your death, it also gives the selected individual to manage the affairs regarding the body.
What does this have to do with Prince Philip. He was able to add in more specific details into his own health care directive. He had wished to die at home in Windsor Castle, even if the hospital advised against that. This is what a healthcare directive can do. It just so happens he was able to get that into the document before it was too late.
Again, you don’t need to be a member of the royal family to accomplish this. Many people don’t want to have their end of days in a hospital. Most would rather do so in the comfort of their home. I’ll admit it may not be a guarantee, as there’s the chance it may not be doable (transportation or other medical issues) but having a health care directive stating your wishes at least makes it so that they at least have to try.
Also, according to his wishes, Prince Philip had asked for a light funeral ceremony. Funeral arraignments have been around forever, but most people have usually chosen to be buried or to be cremated. Modern people have been more specific in what they want in a funeral. They may want a definite religious ceremony, a list of speakers, and even the kind of parties that are held.
The grieving process is already going to be hard for the family. Having these kinds of instructions in a health care directive should help them through the struggle and give them a guide on what their loved ones would have liked.
If the recent pandemic hasn’t been a reminder enough, then the constant news of Prince Philip should be a wakeup call if you haven’t anything set up. We at the Law Offices of Jeffrey C. Nickerson can help out. Don’t be afraid to contact us for more information about setting up a health care directive or even an entire real estate. We’ll be able to make you feel like royalty when you won’t have to worry about this situation in the long run.
We all know what happened on October 24, 1929, just eight days after Professor Fisher’s bullish prediction, when the Wall Street Crash ushered in the Great Depression, ruining the great economist’s reputation. In hindsight, it is easy to spot the irrational exuberance exhibited in the run up to the greatest economic crisis in modern times. However, the fact remains that Professor Fisher was far from the only economist who expressed this opinion.
Market volatility did not end in 1929. On February 12, 2020, the Dow Jones Industrial Average stood at 29,551.42, an all-time high. Less than a month later, on March 9, 2020, the Dow had fallen 5,700.4 points to end the day at 23,851.02, finally bottoming out on March 11, 2020, at 23,553.22, down more than 20 percent from the February 12 high roughly a month earlier.
Flash forward ten months, however, and the market has rebounded, with an all-time market high of 31,385.76 on February 8, 2021. Along the way, fortunes were made and lost and made again. These fluctuations have humbled pedigreed economists, and retail investors have brazenly rushed in to capitalize wherever possible (GameStop, anyone?). Perhaps with the lesson of Professor Fisher in mind, we may be hard pressed to find any economists willing to make bold public predictions regarding the future performance of the current market.
This unprecedented volatility has created not only enormous opportunities but also immense risks, particularly for those who act in a fiduciary capacity. Volatility places the typical trustee, confronted with duties to both principal and income beneficiaries, in the difficult position of needing to balance growth and income while still mitigating risk. So what are the best practices for trustees acting in this seesaw economy? What legal standards should trustees follow? How should trustees react with care and prudence in a market seemingly untethered to any historical sense of value and predictability?
Courts have confronted these questions since 1830, when Justice Samuel Putnam articulated what eventually became known as the “prudent man standard”:
All that can be required of a trustee to invest, is, that he shall conduct himself faithfully and exercise a sound discretion. He is to observe how men of prudence, discretion and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety of the capital invested.
Of course, prudence presents much more of a guideline than a bright line, and courts (and trustees) have struggled ever since to define the standard in a manner that both protects beneficiaries and remains achievable by trustees living in the real, and messy, world of modern capital markets.
For example, for many years following the 1929 Wall Street Crash, trustees understandably placed their focus squarely on risk avoidance, and capital preservation was the name of the game. Large baskets of safe corporate and municipal bonds, and “legal lists” of acceptable investments, ensured that trustees could follow reasonably well-defined standards and avoid the dreaded surcharge resulting from “abuse of the trust.”
Advances in economics in the 1970s significantly changed the understanding of market mechanisms and presented the first big change in trust administration in nearly 150 years. Modern portfolio theory moved the focus from the “prudent person” (as the standard eventually became known) to the “prudent investor.” This subtle yet important change in nomenclature signified a fundamental shift from a focus on safety in individual investments to a more holistic approach aimed at managing risk throughout the entire investment portfolio. Gone were the days of 100 percent bond allocations, and a new era of quantitative risk management dawned.
Inevitably, by the early 1990s this change had found its way to the uniform law movement, and the Uniform Prudent Investor Act was born. As described by the Uniform Law Commission:
The Uniform Prudent Investor Act (UPIA) provides rules to govern the actions of trustees with respect to investment of trust property. Trustees are required to take into account such factors as risk and return, needs of the beneficiaries, the effect of inflation or deflation, general economic conditions, potential tax consequences, and the beneficiaries’ need for liquidity, income, or preservation of capital.
Although the “prudent person” standard received a much-needed facelift in the 1990s, the fact remains that the UPIA retained the “prudence” standard, and courts still struggle from time to time to apply that standard to the facts on the ground. For example, in recent years, some trustees have been found liable for being too conservative. Other times, trustees have been found liable for not being conservative enough. It seems that modern markets have sometimes created an impossible environment for trustees to operate in at a time when trust planning is more important than ever before.
Jeffrey C. Nickerson - Estate Planning Attorney - My Passion is Special Needs Planning!