We rely on our friends, family, and colleagues to help us through life’s challenges.
The people we trust can also be incredibly important when arranging an estate plan. It is critical to appoint a fiduciary to act on your behalf and carry out your wishes should you become incapacitated or pass away. The fiduciary is legally bound to make decisions with your best interests in mind or in accordance with your written instructions, which can be invaluable in times of uncertainty.
Selecting a Fiduciary
Many people select one individual fiduciary to manage their affairs, but the amount of time the role requires may be overwhelming for some. When deciding who to appoint as fiduciary, carefully consider the degree of effort associated with maintaining and managing your affairs. Does this person have the time? And if so, are they emotionally equipped to carry out your wishes? (Keep in mind that this person's job is to step in if you are incapacitated, which would likely be a stressful time).
In some cases, you may want to name co-fiduciaries. This ensures there is always someone available to act even in the event of the death, incapacity, or unavailability of one of them. Of course, choosing more than one fiduciary has its drawbacks. If you choose to have more than one, you will need to decide if they all must act unanimously, or if one can act on your behalf without the consent of the other. If an even number of fiduciaries is named, serious tension can arise when important decisions need to be made. If you require a unanimous decision be made, a deadlock can happen. To avoid this issue, you may want to nominate more than just two fiduciaries, or name another individual to cast the deciding vote in these instances.
Co-fiduciaries may also struggle to coordinate schedules, especially if they are located in different geographical areas or have demanding jobs. Regardless of whether a unanimous decision is required, it is crucial for everyone to be involved in the process of making big decisions on behalf of a loved one. That said, it is also important that all parties involved in the decision-making process get along – which is no easy feat for some families.
Nevertheless, the benefits of having co-fiduciaries may outweigh the drawbacks. If you’re confident that the people you select can get along and make good decisions together, and there are appropriate provisions written into your estate planning documents to address the risk of deadlock, it may be worth appointing several trusted fiduciaries.
Picking a Professional Fiduciary
Should you decide to appoint just one person as fiduciary, you have a couple of options. As previously discussed, appointing a trusted family member or friend can be a good choice depending on the type of work involved. However, if you do not want to pick one person over another, or if your loved ones are not able to act on your behalf, look to a professional to represent your needs. They’ll generally be more available to manage your assets and make unbiased decisions based solely on your wishes and best interests. Although appointing someone outside of the family may ruffle some feathers initially, it can lead to less animosity after you pass.
Whether you opt to appoint several fiduciaries, family members, or trusted professionals, it’s always smart to plan ahead. Although it might not seem pressing right now, selecting a fiduciary can help you protect the legacy you have worked so hard to build. Should you become incapacitated, you’ll be grateful to have someone you can trust represent you in managing your property, taking care of your finances, and addressing other legal matters, instead of having the court appoint someone you might not have chosen.
Get in Touch
Get the guidance you need to plan for your future. At Davis Law Group, we are here to help memorialize your wishes to protect your loved ones and safeguard your assets. Contact us today to set up an estate planning consultation.