When your name a person under your will as executor or trustee under your trust, the person you have named is your fiduciary. When that person gains control of your assets under the terms of your will or trust, your choice should have been made based upon the following considerations.
Consider these questions when making the selection:
What are the responsibilities of your fiduciary, whether named in the will or trust?
The fiduciary you select should be capable of handling the responsibilities you have delegated. More so, the greater the value of the assets, the needs of your beneficiaries, or special concerns such as the operation of your business.
Since your fiduciary is charged with the duty of gathering your assets, satisfying your liabilities and distributing your estate among your beneficiaries, you should pick a fiduciary that can make prudent financial decisions. The complexity of such decisions depends upon the nature of your assets. For example, a closely held business is a more difficult asset to manage compared to a portfolio of marketable securities. Select a fiduciary knowledgeable enough to handle your specific assets.
How long will my fiduciary be required to act?
The Personal Representative’s role (Executor/Executrix) is a short-term one, while that of the Trustee can be much longer, particularly when there are beneficiaries who are minors.
Who are the beneficiaries of my estate? Are there any special family circumstances to consider?
Your fiduciary must be able to communicate effectively with your beneficiaries. Your fiduciary needs to show fairness when there is more than one beneficiary. If you foresee potential conflicts among beneficiaries, you may need to give greater thought to the person you would normally pick. You may even need to appoint more than one fiduciary to provide a means to settle any potential conflicts.
Will my fiduciary charge a fee for its services?
Professionals, such as banks, charge a fee. If you appoint a professional fiduciary, review their fee schedule carefully. In some instances, family members will decline to take a fee.
In selecting a fiduciary, make sure your fiduciary has the time to serve. The task of a fiduciary can be complex and time consuming. Discuss the appointment with your chosen fiduciary.
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