Fiduciaries & What to Consider in Choosing Them
Choosing a fiduciary is an extremely important decision. A fiduciary is someone who agrees to act for and on behalf of another person, creating a relationship of trust and confidence. A large amount of litigation is caused by fiduciaries that violate their duties. Thus, it is essential that select wisely for the different situations when you need a fiduciary.
It is common for individuals to choose their spouse as their financial fiduciary. This may work fine, but if you have a complex estate, it may be difficult for the spouse to manage it. Thus, you may also want to consider family members with financial expertise, corporate trustees, professional advisors, or private professional fiduciaries.
Again, individuals usually name a spouse or adult child as their health-care fiduciary. It is also common for joint agents to be named, with the intent that it takes the difficult medical decisions off the shoulders of just one person. The problem is there is no tie-breaker if the two agents cannot agree. Thus, it is important to have a means for the final decision to be made by one person.
Finally, it is important that your documents provide clear methods for removing and replacing fiduciaries. Having clear procedures in place will reduce the likelihood of litigation. Your attorney can assist you with providing instructions for all possibilities, including if the fiduciary steps down, dies, or is not doing his job.