Who Are My Fiduciaries and How Do I Choose Them?

Fiduciaries

Like many people, you may have spent considerable time thinking about the details of your estate plan but spent very little time deciding who should serve as fiduciaries within that plan. Unfortunately, that increases the likelihood that you already have, or will, choose the wrong person for a fiduciary role within your estate plan. To help keep you from making this common mistake, the Coral Gables estate planning attorneys at Stivers Law explain fiduciary roles and offer some guidance on how to choose people to serve in those roles.

What Is a Fiduciary Role?

A fiduciary is a person who holds a legal or ethical relationship of trust with another person or a group of people. Put another way, a fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. Furthermore, a fiduciary duty is the highest standard of care in equity or law. A fiduciary is expected to be extremely loyal to the person to whom he/she owes the duty and must not profit from the position as a fiduciary. A fiduciary can receive a fee for services; however, he/she should not profit at the expense of the other party.

What Are the Fiduciary Roles Within Your Estate Plan?

The average estate plan includes several fiduciary roles within the plan. Among the most common of those roles are:

• Executor. When you create your Will, you will be required to appoint an Executor who is responsible for overseeing the administration of your estate during the probate process.
• Trustee. If you incorporate a trust agreement into your estate plan, you will need to appoint a Trustee. Your Trustee will manage and invest trust assets as well as administer the trust agreement using the terms you created.
• Agent in a Power of Attorney. When you create a POA you must appoint an Agent who will have the legal authority to act on your behalf in legal matters other than healthcare decisions.
• Agent in an Advance Directive. If you create a health care power of attorney, you will need to appoint an Agent to make healthcare decisions for you if you are unable to make them yourself because of your incapacity.
• Guardian. The only official opportunity you will have to nominate someone as a Guardian for your minor children if one is ever needed is found in your Will.

Choosing the Right Fiduciaries

While you have the right to choose anyone you want to a fiduciary role, making a hasty choice can have negative consequences for your estate plan and, ultimately, for your loved ones. When choosing fiduciaries, consider the following guidance:

• Choose someone with the skills/experience to successfully fulfill the duties and responsibilities of the role.  Not all fiduciary roles require special skills, but some do. A Trustee, for example, should ideally have a legal and/or financial background.
• Choose someone you trust completely. A fiduciary may need to make extremely important decisions and/or manage valuable assets. You must be able to trust a fiduciary unquestionably.
• Avoid choosing someone who is likely to create a conflict. There are numerous potential conflicts in an estate plan. For example, if your Trustee has an existing personal relationship with one beneficiary but not with the others, it can create a conflict.
• Choose someone practical. Ask yourself: Does the person live close enough? Will his/her job allow sufficient time to perform the duties required? Will the person be able to set aside emotions and think clearly when necessary?
• Choose someone who is willing to accept the job. Never assume that someone is willing to be your Executor, Trustee, Guardian, or Agent. Always ask them directly before appointing them.

Contact Coral Gables Estate Planning Attorneys

For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about choosing the right fiduciaries for your estate plan, contact the experienced Coral Gables estate planning attorneys at Stivers Law by calling (305) 456-3255 to schedule an appointment.