Estate Planning, Probate, Small Business, & Asset Protection

Legally Speaking: How to Pick a Fiduciary

Legally Speaking: How to Pick a Fiduciary

How to Pick a Fiduciary

(Trustee, Executor, Power of Attorney)

Choosing a Successor Trustee, Personal Representative (Executor), or an Agent in your Medical or Financial Powers of Attorney can be difficult. When you nominate someone, you’re picking someone to make decisions for you and your loved ones when a crisis occurs (death or disability).  Understanding their job can help you make the right selection.

When considering WHO to appoint, factors include:

Geography – are they close enough; can they travel?

Willingness – will they want to perform their duties?

Capacity – do they have the skills, attributes, education, and temperament?

Trust – can you trust them 100% to be honest and to see the job through to its end?

Cost – if you choose a professional, will your assets support the fees?

Trustee

A Living Trust is often the center of a well-designed Estate Plan. You are typically the Trustee during your lifetime, but your successor Trustee will take over after your death to gather your assets, pay your final expenses, and distribute your wealth according to your wishes.  You can choose a trusted person, and a backup or two, or a financial institution, to be your Successor Trustee.

Be clear in your Trust so your Trustee knows exactly how to handle various situations that can arise after your passing.  Your Trustee will only control Trust Assets and not the rest of your estate, therefore it is critical to fund your Trust correctly during your lifetime.

Powers of Attorney (POA)

A Power of Attorney appoints an “Agent” to make decisions on your behalf if you cannot due to incapacity. They can grant broad powers or be narrow in the authority they delegate.  Some empower your Agent immediately, while others allow your Agent to act only after a triggering event. Two common types are:

Financial Powers of Attorney

These grant a person power over your property and finances.  If you are incapacitated, your agent can pay your bills, sell your home, file your taxes or make investment decisions regarding your assets.  In most cases you appoint a person, but you can also appoint a financial institution or a private licensed fiduciary. They must only do what is in your best interest and cannot use your money for themselves, except to reimburse themselves for expenses or to receive reasonable compensation for work done on your behalf.

Health Care Powers of Attorney

This grants authority over medical treatments, access to your medical records, which healthcare provider to use, etc.  Your agent can communicate your preferences regarding:

Autopsy

Organ Donation

Cremation vs Burial

The level of life support desired when terminally ill or permanently comatose

Mental Health Care Power of Attorney:  Arizona has a separate law covering who can make your mental health related medical decisions when you are confined to a psychiatric institution.

Personal Representative (P.R. or Executor)

Your P.R. will take care of your Estate as indicated in your Last Will.  If there is not a trusted person to choose, a paid professional can be chosen. Being a P.R. is hard work and entails court-mandated deadlines, so pick a suitable P.R. A close family member may not always be up to the task.

A Gift to your Loved Ones.

Choosing others to act on your behalf NOW will save your loved-one’s much grief and expense upon your incapacity or death.  Avoid the courts and the emotional cost by selecting now while alive and well so you can Leave a Legacy, not a Burden!

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LEAVE A LEGACY, NOT A BURDEN!

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