I wear a lot of hats. I don't mean I have lots of responsibilities, I mean I wear. a. lot. of. hats. Three fedoras, two driving caps, two Panamas, two cowboy hats, a couple of baseball caps, one Air Force ORF cap - that's what happens when you spend too many years in the tropics and South Texas without enough (or any) sunscreen. I've had enough stuff cut, frozen and burned off my face and scalp to last a lifetime.
However, I - and probably you as well - wear a lot of hats in the colloquial sense as well. So do a lot of our clients. For example,
In a business formation, a client can be -
- a partner, member, shareholder, AND
- an officer, director, employee, manager
In estate planning and/or probate, a client can be all of the following:
- a beneficiary,
- an executor,
- a trustee,
- an agent under power of attorney (financial or medical)
Keeping in mind which hat you have on can be critical if, for example, you own a business and you're buying stuff for your personal use but using a company credit card to do so - if it's a forgot-my-personal-card-and-need-this-now situation, make sure you turn in the receipt and reimburse the company for what you spent. And make sure it's not a regular occurrence - you're vulnerable to a claim that you're using the company as your personal piggy-bank and somebody suing your company could "pierce the corporate veil" and come after your personal assets.
Here's another one I see pretty regularly: "My dad died last week, but I have his power of attorney so I'm going to sell his car". Nope. Your agent-under-power-of-attorney hat goes up in smoke when the person who gave it to you (the "principal") dies. If you're also the executor under the will, you can use that hat AFTER the probate court issues letters testamentary to you, but not before. If you also have a beneficiary hat on your hat rack, you could be liable under a legal concept called "self-dealing" if you distribute money to yourself with your executor hat on, but don't distribute to other beneficiaries.
A related hat issue is when you use your mom's financial POA to transfer property from her to yourself. No can do, Podnah - that's also a breach of fiduciary duty.
So, hats are cool (or warm, depending), but each carries both rights and responsibilities. Make sure you're wearing the right hat for the activity in which you are engaging!
As always, the above is legal information, not legal advice, and it's based on Texas law because I'm a Texas lawyer. If you have questions about your various hats, talk with an attorney experienced in your area of hat-wearing!
Musings, observations, the occasional whineage and some funny stuff.