Choosing people for the fiduciary roles within your estate plan should be done with great care because appointing the wrong person can have a detrimental effect on the overall success of your plan.

Creating a comprehensive estate plan requires you to make numerous important decisions. Although many of those decisions are directly related to the distribution of your estate assets after you are gone, not all of them are. In fact, some of the most influential decisions you will make within your estate plan are often the ones people spend very little time making. These are decisions related to fiduciary roles within your plan. Choosing people for the fiduciary roles within your estate plan should be done with great care because appointing or nominating the wrong person can have a detrimental effect on the overall success of your plan.

WHAT DOES IT MEAN TO BE A FIDUCIARY? A fiduciary is a person who holds a legal or ethical relationship of trust with another person or a group of people. Put another way, a fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances that give rise to a relationship of trust and confidence. Furthermore, a fiduciary duty is the highest standard of care in equity or law. A fiduciary is expected to be extremely loyal to the person to whom they owe the duty and must not profit from the position as a fiduciary. A fiduciary can receive a fee for services; however, they should not profit at the expense of the other party.

TIPS FOR CHOOSING YOUR FIDUCIARIES. Although every estate plan is unique, most have at least one fiduciary role within the plan and most have several fiduciaries. When you are deciding who to appoint to these fiduciary roles within your estate plan, considering the following tips:

* Personal Representative – When you create your Will, you will appoint a Personal Representative. Your Personal Representative is responsible for overseeing the administration of your estate during the probate process. Appoint someone who:

-- Will not be so overwhelmed with grief that they cannot focus on what needs to be done.

-- Lives close enough to be able to secure and manage the property while the probate process is going on and can handle the distribution of your assets at the end of the process.

-- Is good at conflict resolution.

-- Will not hesitate to seek assistance from professionals if it is needed.

* Trustee – If you incorporate a Trust into your estate plan, you will need to appoint a Trustee. Your Trustee will manage and invest Trust assets as well as administer the Trust and make distributions using the terms you created. Appoint someone who:

-- Has a financial and/or legal background, or who understands that they should hire a professional to advise them.

-- Does not have any conflicts with beneficiaries.

-- Lives close to any real estate held by the trust.

-- Is willing to serve in the position.

* Agent in a Durable Power of Attorney – A Power of Attorney allows you to appoint an Agent who will have the legal authority to act on your behalf in legal and financial matters. A POA can be general or limited. If you create a general POA, appoint an Agent who:

--You trust unconditionally.

-- Has the ability to handle challenges to their authority because some third parties will likely question your Agent’s authority.

* Agent in a Healthcare Power of Attorney – A Healthcare Power of Attorney allows you to appoint an Agent to make healthcare decisions for you if you are unable to make them yourself because of your incapacity. Appoint an Agent who:

--Knows you well enough to know what decisions you would likely make.

-- Will be able to understand the often-complicated medical jargon and explanations.

-- Is able to remain calm under pressure and make difficult decisions

CAN I APPOINT MY SPOUSE AS A FIDUCIARY? You can appoint anyone you wish to a fiduciary position; however, sometimes there are cases where it's not in your best interest (or your spouse's) to appoint your spouse to a fiduciary role.

WHAT HAPPENS IF I FAIL TO APPOINT SOMEONE TO A FIDUCIARY POSITION? It depends on the position, but it often means that a court will be forced to appoint someone for you without your input.

CAN I APPOINT CO-FIDUCIARIES OR SUCCESSOR FIDUCIARIES? You can — and should — appoint successor or alternate fiduciaries. You can often appoint more than one person to a fiduciary position; however, doing so can create additional confusion. Talk to your estate planning lawyer before appointing co-fiduciaries.

If you have additional questions about how to pick fiduciary roles within your estate plan, contact us by calling 253.858.5434 to schedule an appointment. We proudly represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.