When You Can't Be There — The Importance Of Fiduciaries In Estate Planning

Perhaps the most important role in your estate administration is that of a fiduciary. What is a fiduciary? What must one do and what can you expect of them? And who should you select? Here's what everyone needs to know about this key person. 

What Is a Fiduciary?

A fiduciary is defined as 'a person or organization who is responsible for managing money or property for another person or organization.' The assets they are charged with are not theirs. Instead, they must act in ways that benefit the one who entrusted the assets to them and the beneficiaries of those assets. In estate planning, the primary fiduciaries are your executor or personal representative and trustees of a trust. 

What Does the Fiduciary Mean for You?

Being a fiduciary related to estate administration is a big responsibility. Fiduciaries must take charge of assets, protect and secure them, maintain them, liquidate them, and distribute them to beneficiaries. They are expected to treat the estate or trust's assets as though these were their own — one could even say, better than if they were their own. 

But this person is also your representative, meaning that their job is to try their best to achieve the results you would have wished. This sometimes includes making decisions that interpret your will — rather than their own — from all the relevant guidance they have.

For instance, perhaps you direct that your Star Wars action figure collection be distributed to your siblings with certain figures going to named individuals. You can expect the executor to maintain the collection and prepare it for your siblings. They will decide on a method for everyone to choose the figures they want. Finally, they'll deliver the specific figures to the named individuals in your will. 

Who Should Be Your Fiduciaries?

Many people select people they know and love to serve as fiduciaries. This can be helpful since the person knows your estate, your family dynamics, and your wishes. However, family and friends may be too emotionally invested or untrained to serve as good fiduciaries. Other planners use more impartial fiduciaries like attorneys, accountants, and financial planners.

Do you have complicated assets that need specific management? You may appoint special fiduciaries to care for things like businesses, animals, minor children, or some investments.

Where Can You Learn More?

Selecting the right fiduciaries is one of the most important decisions you'll make during estate planning. When you have the right persons involved, you can rest easy that your estate is in good hands. Start finding the right hands by meeting with an estate planning attorney in your state today. 

For more information about estate planning, contact a local professional, or visit a website like https://wolfleyandwolfley.com/.