A fiduciary is someone that has a legal obligation to serve the best interests of another individual or individuals. There are fiduciaries that play a role estate planning, and we will look at them here.
Estate Executor
The simple will is the most commonly used estate planning document. If you create a will to direct postmortem asset transfers, you would name an executor to act as the administrator after your passing. An estate executor is a prime example of a fiduciary.
They would be compelled to follow your instructions to the letter and serve the best interests of the beneficiaries that are named in the will. During probate, the court will determine the validity of the document, and the executor will pay final debts, including taxes.
All the assets will be identified, inventoried, and secured by the executor. They will get appraisals, and the executor will liquidate property if necessary. When all of the tasks have been completed, the court will close the estate, the assets will be distributed to the beneficiaries.
Living Trust Trustee
Another type of fiduciary is a living trust trustee. If you establish a living trust as the centerpiece of your estate plan, you would be the trustee while you are living. In the trust declaration, you would name a successor trustee to assume the role after your passing.
The successor trustee would be a fiduciary, and they would have a duty to look after the best interests of the beneficiaries. After your passing, they would distribute the assets to the beneficiaries, and there would be no need for probate.
This is a positive because the probate process is somewhat problematic for the beneficiaries. They do not receive inheritances until the estate has been probated, and it will take close to a year in many instances.
Probate expenses are another drawback, and there is a loss of privacy, because the general public can access the probate records. The avoidance of probate is one major benefit that a living trust will provide, and there are others that we will look at it in a future post.
Health Care Representative
Many people become unable to communicate their medical decisions at some point, and you should address this eventuality when you are planning your estate. You can name an agent to make medical choices on your behalf in a Advance Directive.
Durable Power of Attorney
Your incapacity plan should also address legal and financial affairs, and you can include a durable power of attorney to name a fiduciary to manage your financial affairs. If you have a living trust, you can empower a disability trustee when you are drawing up the document.
Legal Guardian
In some cases, the state will appoint a guardian or conservator to act on behalf of an incapacitated adult. This is yet another example of a fiduciary, and the legal guardian of a child would have a fiduciary duty to the child.
All Attorneys
We should point out the fact that all lawyers have a fiduciary duty to their clients. They cannot put their own interests above the interests of their clients under any circumstances.
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If you want to learn more about the estate planning process in an enjoyable and efficient manner, you should attend one of our upcoming webinars. These sessions are being offered free of charge, so you have everything to gain and nothing to lose.
You can check out the schedule if you visit our webinar page, and if you decide to join us, follow the instructions to register so we can reserve your spot.
Need Help Now?
We are ready to spring into action if you have decided that it is time for you to work with an Essex Junction, VT estate planning lawyer to put a plan in place. You can send us a message to request a consultation appointment, and we can be reached by phone at 802-879-7133.
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