Four Considerations when Choosing Fiduciaries
Once you have decided to address your estate planning needs, you may have to make some difficult decisions about who will be in charge of your estate, and who you will entrust as a fiduciary to make decisions and manage assets for your beneficiaries. Here are four considerations for choosing fiduciaries:
- Executor/executrix of your will. Those who use a last will to state their final wishes must choose an executor or executrix. This person will be responsible for taking care of the estate administration. This may include wading through probate, paying final debts, liquidating property, and ultimately distributing the assets in accordance with your wishes. You may want to consider someone who has some or all of the following qualities: legally or, financially savvy, trustworthy, and/or close enough to you such that they understand your intent.
- Trustee of your trust. When using a trust to arrange for future asset distributions you must select a trustee to administer the assets. You may decide to choose an individual who has no conflicts of interest. Again, this may be someone with legal or financial acumen, or simply someone you trust to carry out your wishes. You may also choose a professional entity such as a bank.
- Powers of attorney. You also may want to select someone as a power of attorney, either for a general power to act, pursuant to a health care directive, or both. Most people select their spouse, and then name as a successor a child, close (younger) relative, or a close friend, to have this power.
- Consider an independent fiduciary. Selecting a trustee and other fiduciaries can be difficult. If you have two children, the older child may feel slighted if you choose the younger child, or the child who lives further away may feel slighted if you choose the child who lives closer. Additionally, if your estate is large, then there may be significant liability when managing assets. Accordingly, you may want to consider an independent third party, including a professional trust company, to oversee your estate.
The key is to remember that one of the main goals of estate planning is to minimize post-death strife and tension, so the best practice is to discuss your intent, and the rationale for the decisions you make, with all involved parties well in advance.
For assistance with any legal matters related to your business or estate planning, contact Fournier Legal Services at jfournier@jeflegal.com or 860.670.3535 now for a consultation and planning session.
Joseph E. Fournier is an Attorney and a CPA who has more than twenty years of experience in a variety of business legal matters, including start-ups and company formations, drafting shareholder and operating agreements, contracts, employment law, commercial litigation, tax planning and audit defense, and mergers and acquisitions (M&A). He also handles estate planning matters, such as business succession planning, wills, trusts, and probate.