An important aspect of planning your estate is naming fiduciaries.
Fiduciaries – in legal language – are people who make decisions on your behalf and in your best interest. All of us have fiduciaries in our life like our banker, our real estate agent, or our attorney.
When you make your estate plan, you need to specifically name some people as fiduciaries for various aspects of your Estate.
You may name an individual, such as a spouse, adult child, or good friend. In some situations it is best to name an institution like a bank or Trust as a fiduciary instead of a person. Whenever choosing fiduciaries, you should consult your attorney. A fiduciary has to be someone who:
- can shoulder responsibility
- is sensible and practical about making various decisions
- is tough enough to handle invalid claims from creditors
- is able to organize all documents, consult the right experts etc.
Your estate plan may call for different types of fiduciaries, but often you can name just one person to fill all the different roles. You will also need to name backups for each fiduciary role in your estate plan, so that your plan will still work if something happens to the person you have named.
Some fiduciaries you’ll likely need to name include:
- someone to look after your minor children in case of your death
- someone to handle your estate
- someone to look after your Trust
- someone as a healthcare representative to make medical decisions for you in case you become incapacitated
- someone to handle financial decisions on your behalf if you become unable to do this for yourself
- someone to make decisions in case you fall mentally ill and cannot look after your estate