Considering a family member as your fiduciary?
Here are some questions you should ask:
1. Does the relative have a strong personality, capable to handle unfamiliar tasks, on very short notice? Can the person respond and act in an organized fashion? In the course of administering a will or trust, the person will have to meet a number of deadlines such as probate filings, personal and/or estate tax filings and periodic financial reports to heirs, beneficiaries or the court..
2. Is the person an "administrator type", familiar with handling potentially large amounts of paperwork from banks, accountants, attorneys, government offices, pension plans, stock brokers, real estate agents, etc.? Can the person communicate efficiently and clearly with these organizations and with your heirs or beneficiaries?
3. Does the person have the time required to handle the administration? Depending on the size and complexity of your trust or estate, the time required for the administration can be many hundreds of hours and go on for years. For someone with a full-time job this additional workload can be overwhelming.
4. Does the person have the educational background and skills required to handle your assets, if they include real estate, life insurance policies, retirement accounts, stocks, bonds, mutual funds, loans, mortgages, income property, collections, antiques, maybe even an operating business?
5. How has the person managed his or her own finances? Does he or she have an unblemished character and the moral fortitude to handle or have access to potentially large amounts of money?
6. If the person's ethics are solid and unquestionable, how confident are you that he or she will faithfully follow your instructions, if your chosen person does not agree with the instructions in your will or trust? Will your intentions be second-guessed and possibly re-interpreted by the fiduciary, or will your instructions be followed to the letter and your assets handled exactly like you have instructed?
7. How are your family dynamics? Is there mistrust, envy, animosity, or outright hostility between your chosen fiduciary and potential heirs or beneficiaries? Consider that it takes just one person who thinks they got slighted, overlooked, or treated unfairly to end up in court and your life's work and savings will be gobbled up by attorney fees.
8. If there is potential for legal challenges, will the person you have in mind be able to stand up for you? Does he or she have the backbone to defend you, making sure your wishes are followed and that the product of your life's work is handled the way YOU want it?
9. Can the person stomach personal attacks, false accusations, nasty attorney letters, and personally being in court to defend your will or trust? Is he or she likely to succumb to pressure from family? Will he or she throw in the towel if a legal dispute drags on for months or even years or the attacking party has a particularly nasty attorney?
If you are not sure about the answers to any of these questions, the administration of your will or trust might be better served by a private, independent fiduciary. As professional fiduciary, we are not emotionally involved in family matters, we can make unbiased decisions, based strictly on the instructions you left and the language in your Will or Trust.
Please call us if you have questions or to discuss your personal situations.
Consultations are free and confidential.
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