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What Role Does a Private Fiduciary Play?

It’s necessary for all estate plans to name someone to settle financial matters after your death. Or, in the event you’re no longer able to act on your own behalf. Selecting a private fiduciary is one of the most crucial decisions you’ll make.

You invest careful thought into estate planning, but if you choose the wrong person to oversee the details, it’s unlikely your wishes will be carried out as you’d intended. Here’s a look at the role and responsibilities of a fiduciary, so you can better understand your decision. 

What is a Private Fiduciary?

First and foremost, a fiduciary must be trustworthy because this role is filled by a person (or institution) with the power to act on the behalf of others. Sometimes this arrangement happens through a private agreement. But in certain circumstances, the court system appoints an individual.

There are different types of fiduciaries. For example, an executor has a fiduciary duty to the beneficiaries of an estate. But overall, this position comes with a legal burden to behave in a fair and honest manner.

Choosing a Private Fiduciary

It’s a tough choice, but when selecting a fiduciary, family members, friends, business associates, and attorneys are all justifiable options. In order to avoid conflict, we suggest designating only one fiduciary, rather than co-fiduciaries to serve together. But remember, it’s important to select more than one backup.    

It’s a Responsibility Not a Privilege

Your fiduciary will be responsible for tasks like paying any remaining bills and income taxes, overseeing trusts, taking inventory of investments and properties, as well as distributing assets.  

There will be meetings and phone calls with beneficiaries and various professionals, as well as official letters to draft. The person you select needs to communicate effectively with all relevant parties, such as financial institutions, legal representation, and beneficiaries.

They have the additional responsibility to submit a regular written report addressed to your heirs. The “Account of Fiduciary” summarizes all their financial (and other) activities. Finally, your private fiduciary will likely need to hire people to help settle your affairs, possibly including real estate agents, attorneys, and financial advisors.  

Proper planning helps to prevent family feuds and protects your legacy for loved ones. As your estate planning law firm, we help you evaluate your best options when choosing a private fiduciary.

To schedule an appointment, please contact our office at (925) 447-1250.

Filed under Estate Planning Tips

Money Mistakes People Make After the Death of a Spouse

Everyone handles loss in their own way, but there are some common money mistakes people make after the death of a spouse. The following are four suggestions to help your finances weather this vulnerable time.

Don’t Rush Important Decisions

Grief is powerful. It alters the way we think and can affect memory function, as well as our ability to focus. If major decisions can wait, it’s best to put them aside for a while. It’s okay to pause. Well-meaning friends and relatives will likely offer unsolicited advice, but now is not the time to be moving money around, unless it’s really necessary. Instead, allow yourself the space to process emotions.

Spending Spree

Perhaps one of the most common money mistakes someone can make in this situation is to go on a spending spree. When a bereaved spouse attempts to move on or distract his or herself with retail therapy, or vacations, it can quickly lead to a downward financial spiral.

Money Mistakes on the Home Front

Sometimes a surviving spouse wants to hold on to the home they shared with their partner, and those memories they cherish there. But other times it may seem too painful not to sell right away. Maybe you no longer need as much space, or hope to relocate closer to family. All of those reasons are valid. Still, try to defer any major decisions for a few months.  

Even considerations such as paying off the mortgage might sound responsible, but consider meeting with a financial planner to ensure you’re thinking clearly and won’t be strapped for cash down the road.

Review Your Finances and Estate Plan

When you feel up to reviewing your finances, revise a budget. Spending needs will be different with one less person in the house, and you might choose to make some lifestyle changes. If you weren’t responsible for handling financial decisions in the past, be certain you fully understand your investments, sources of income, and all expenses, to avoid money mistakes.  

At this time, it’s also a good idea for the surviving spouse to review his or her own estate plan. Please contact us at Lewman Law for further information and assistance. Our office can be reached at (925) 447-1250.

Filed under Estate Planning Tips, Legal Services