What is a Fiduciary?
A fiduciary is someone to whom you give the authority to act on your behalf in certain matters, usually related to finances or health care. In an estate planning context, there are many different roles that fiduciaries might play. A health care surrogate or power of attorney may act on your behalf while you are still alive, while the executor of your will only gains authority to act after you die. A trustee may act as a fiduciary during your life as well as after your death, depending on the type of trust you create.
You may choose one person to fill all these roles, or you may delegate fiduciary responsibilities to a handful of different individuals. In either case, there are several important things you have to consider when choosing a fiduciary.
1. Is the Individual Willing and Able to Do the Job?
The law is often very broad in whom it allows to be a fiduciary. 18 is generally the minimum age requirement; however, even if allowed, a person that young may not have the maturity to serve as a fiduciary. Similarly, an older person may be unavailable to serve when needed due to death or mental incapacity. When deciding on fiduciaries, you should take factors such as age, maturity, and mental capacity into consideration.
Serving as a fiduciary is a difficult job with serious implications. You should never name someone for such a position without talking about it first. The individual may not be willing to take on such a heavy responsibility, and it is not fair to impose it without his or her knowledge.
2. Is the Individual Trustworthy?
A fiduciary is someone whom you grant to make decisions on your behalf. Depending on the circumstances, he or she may even have the power to override your choices. Therefore, it is critical that you choose someone you can trust to put your wants and needs first. You also have to communicate to your fiduciary what your wants and needs are. Otherwise, he or she may have the good faith to act on your behalf but not know how to proceed. An elder law lawyer could also serve as your fiduciary if you don’t feel there is anyone else in your life that you would like to delegate for this role.
3. Does the Individual Live Near You?
It is not required that the fiduciary live in close proximity to you, especially with the expansion of communication tools used to conduct business remotely. However, there are some tasks that a fiduciary must carry out in person, and this may be more convenient if he or she lives close by.
An elder law lawyer can help you with tasks related to estate planning, including choosing a fiduciary.