Client Alert

Be Selective When Appointing A Fiduciary Of Your High-Asset Estate

Even in the early stages of the estate planning process, many of our clients already have a fiduciary or fiduciaries in mind they want to name in their plan. A fiduciary or fiduciaries are trustees who are named in a trust or executors who are appointed in a will. However, deciding on a fiduciary is not a decision that should be made on a whim. There are some critical aspects that you should be careful not to overlook.

Consider these potential pitfalls before designating an executor or trustee of your estate.

Two Or More Fiduciaries Can Double The Risk Of Conflict

Take care when naming multiple executors or trustees to administer your will or trust. This can lead to gridlock and disagreements that prohibit them from carrying out their duties. Consider the relationship between the persons you are considering and the “what-if” scenarios.

Third-Party Fiduciaries May Be A Better Option

Instead of appointing individuals to manage and administer your estate, you also have the option of selecting a bank or professional corporation as a fiduciary. While these are likely a costlier option, it can reduce the risk of disagreements and family tensions from arising.

Ensure They Will Be Able To Fulfil Their Duties

There are more qualities that fiduciaries should have than being responsible, organized and of sound mind and judgment. You should ensure that they will have the capacity and knowledge to administer your estate. Do they frequently travel or are unavailable? If they will not have the time to manage the estate, you may want to consider selecting someone who is familiar with the administration process and has the time to do so.

The greater the value of estate assets, the higher the consequences will be for mistakes or conflict arising. Discussing your options with an attorney can help you to make the decision that is right for your situation.

Posted in Client Alert, Trustees / Executors.