Choose Your Fiduciary Wisely: Tips for Selecting the Right Person

Family DiscussionOne of the most important decisions you will face while creating your estate plan is choosing the fiduciaries. There is not just one person whom you will select. Instead, you will select a person for each role that needs to be filled. This includes your executor, the attorney-in-fact, the power of attorney, the trustee, etc.

A fiduciary, by definition, is someone who is granted certain rights and powers that are exercised to benefit a person or estate. They must act in good faith and candor while exercising their rights, and can never be self-benefiting. Basically, they are there to serve out your wishes.

While you may be inclined to choose a family member, you may want to consider your options before you finalize who will be in control of your estate’s biggest assets and controls. Family is not always the best option, especially when it comes to making financial decisions that could impact themselves.

Tips for Choosing Fiduciaries

When you are selecting people for your roles, here are a few things that you will want to keep in mind:

  1. Choose different people to fill the various roles. While you could select just one person, it may be in your best interest to select different people for each of the roles you need to fill. A comprehensive estate plan has complicated roles – and not just the executor – to fill. For example, you may want a close relative to handle your healthcare decisions, but you may select an accountant or even an attorney to handle your financial decisions if you become incapacitated. You may select an attorney to work as your executor so that family members are not fighting with another family member who is in control of the estate. Naming different individuals to serve out these various roles could offer a good system of checks and balances – so that one person isn’t in control of everything.
  2. Consider appointing co-fiduciaries instead of single ones. While you are selecting people for the various roles you have open, consider naming co-fiduciaries rather than single individuals. This adds a second layer of protection, and ensures that decisions are made carefully on behalf of your estate. Co-fiduciaries especially make sense if you have multiple beneficiaries, if you have a complex estate, or if one of the fiduciaries lives far away.
  3. Consider your trusts’ value and term before picking a trustee. When selecting a trustee, you need to consider the term of the trust as well as the asset value within that trust. If your trust will continue through the lives of grandchildren, then you will want to name an individual who is old enough to handle decisions when the trust is ready for distribution. Also, you will want to name a secondary trustee in the event that your primary cannot make decisions or is no longer around.
  4. Consider the benefits of a professional trustee. While you may think that a family member will serve his or her role as trustee just fine, you may be better off picking a professional. A professional who specializes in estate settlement and trust administration already understands the role, the process, and even the laws – so that the process is much smoother. Also, a professional doesn’t have any personal stake in the trust; therefore, the decisions are not driven by personal gain.
  5. Consider the traits of your fiduciary. When you are selecting family and friends to fill these roles, you need to look for specific traits. Not everyone is suitable to handle an estate, so you need someone who is organized, diplomatic, responsible, financially stable, and even-tempered.

Speak with an Estate Planning Attorney to Assign the Right Fiduciaries to Your Estate

A good attorney can help you pick the right people to fill the various roles within your estate plan. Contact The Law Office of Andrew M. Lamkin, P.C. today to setup your estate plan and start naming individuals as your fiduciaries. Call 516-605-0625 to schedule a free consultation, or ask a question online.

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