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.
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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.