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3 questions to consider when appointing fiduciaries

On Behalf of | Sep 27, 2022 | Blog, Estate Planning |

A fiduciary is a person who holds a trusting legal or ethical relationship with another person or group. The fiduciary will act on behalf of the person who appointed them, therefore they should act in an extremely loyal manner to the person to whom they owe a fiduciary duty.

Examples of fiduciary roles in estate planning include personal representatives, trustees and guardians. Individuals entering the estate planning process should consider several questions before deciding who to name as their fiduciaries.

1. Is this person trustworthy?

The biggest question to ponder while deciding who to appoint as a fiduciary is whether this person is trustworthy and ethical. Since the fiduciary may have control over large assets in the estate or over important medical decisions, the appointor needs to ensure a trusting relationship exists.

2. Will appointing them create conflict?

If this person has a combative personality or is capable of being easily swayed, appointing them as a fiduciary may lead to conflict. For example, if the potential fiduciary has a relationship with one or some of the beneficiaries (i.e. those who benefit from the will or trust), they might receive an actual or perceived unfair advantage.

3. Is this person willing to serve?

Never assume that someone wants to serve as a fiduciary. Ask before appointing someone as a personal representative, agent, guardian or trustee. They might have personal or professional reasons to not want to take on fiduciary duties.

Thinking through the decision of who to appoint as fiduciaries during estate planning can save family and loved ones from future stress and conflict.