A fiduciary is someone who is both legally and ethically required to carry out your interests—even if it means putting your wishes above their own. Common fiduciaries include financial advisors, executors, attorneys and trustees. The person you designate as your fiduciary in any of these roles should be someone that you trust completely, as they will have responsibility over your finances and assets both before and after you pass. You can choose different people to serve as fiduciaries in each of these position; however you will want to make sure they’re qualified enough to handle all duties of the occupation. For example, while you could name your spouse your executor, trustee and legal guardian of your children should you pass unexpectedly; you probably don’t want them as your financial advisor.
Since naming a fiduciary comes with a lot of trust and responsibility, there are several questions you should ask yourself as you consider your prospectives.
1. Do You Trust This Person?
In many cases, this person will have the fiduciary power over your assets and finances. You’ll need to trust them exponentially; especially if you don’t fully understand the intricacies of their position. For example, if you decide to hire a full-time financial advisor to manage any complexities regarding your assets; you should be able to trust that everything they recommend will be in your best interest.
2. Do They Know and Respect Your Wishes?
When it comes to choosing an executor or trustee, you want someone that will carry out your last will and testament exactly as written. This person will also then become a fiduciary for your benefactors, ensuring that your assets are used as dictated in your will. Additionally, there’s a high chance something will be left out of your will, leaving your executor in charge of making the final choices. Since you won’t be able to speak to them from beyond the grave, you should ensure you pick someone that will act in your best interests in all circumstances.
3. Should You Go With Family or a Third Party?
If you’re creating your living will in your twenties, you may be prone to naming an older sibling or relative as your fiduciary executor in the case of your death. However, as you get older, you should likely swap to someone who will survive you. Additionally, you might want to consider using a third-party like a bank or law firm as your fiduciary. Since their position would be neutral, you would be able to avoid any potential family conflicts that could arise if you named a relative as your executor.
If you’re ready to prepare your estate plan, speak with experienced trust attorneys in Arlington, TX about your next steps and options.
Thanks to Brandy Austin Law Firm, PLLC for their insight into estate planning and picking a fiduciary.