A fiduciary’s responsibility is to provide the “highest standard of care”. They are given the power to act on behalf of another. This power requires a relationship that has honesty, trust, and loyalty. An article from The Balance, “Fiduciaries and Their Role in Your Estate”, lists out the various roles a fiduciary can fill.
A fiduciary acting as your personal representative or executor is in charge of settling your estate, after you pass, in compliance with the directives you have set out in your estate plan. You are able to appoint one or more fiduciaries, and you are not limited to appointing individuals, they can also be institutions. As your personal representative or executor, the fiduciary(s) is accountable for gathering your assets, settling remaining debts and tax obligations, and then distributing what remains in your estate to the beneficiaries. Not only is your fiduciary in this case responsible for carrying out your final wishes, by they also have a responsibility to your beneficiaries.
The role of trustee or successor trustee is another that is filled by a fiduciary. Whether the trustee is established for a revocable or irrevocable trust, they have a duty to your beneficiaries after you die. Instead of being accountable to you, your fiduciary’s focus switches to those who are to benefit from your estate.
If you have children and you were to pass away while they are still minors, you can ensure they are taken care of by having established a fiduciary to be their guardian. If you are married, you will likely name your spouse not only as fiduciary where your children are concerned but also as fiduciary for all your estate planning documents. If not, you might name one fiduciary for your children and different fiduciaries for other various capacities.
You can also establish a fiduciary, durable power of attorney, or a health care agent to oversee medical decisions as in the event of being incapacitated. They will make sure that your preferences set out in your advanced health care directive are followed through on. For this role, the fiduciary cannot be an institution nor can it be a health care provider that is treating you.
Choosing the right fiduciary can feel overwhelming, but the best way to go about it is to talk to your loved ones. If you want to appoint one, talk to them about their comfort level with the role. Having open communications is the best way to appoint the best fiduciary.
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Reference: The Balance (May 24, 2018) “Fiduciaries and Their Role in Your Estate”