The Answers You Need About Fiduciaries
Learning about fiduciary services and the role of fiduciaries can feel immensely confusing. At the Center for Elder Law & Estate Planning, we understand. That is why we aim to alleviate the stress and uncertainty surrounding estate planning and estate administration.
This frequently asked questions page answers common questions about fiduciaries and our fiduciary services. We hope it provides clarity and peace of mind.
What Is A Fiduciary?
A fiduciary is a person or organization that acts on behalf of another, managing assets and making decisions in their best interest. Fiduciaries are bound by a duty of loyalty and care, ensuring that they prioritize your needs above their own. In the context of estate planning, a fiduciary may be responsible for managing assets, making financial decisions or carrying out specific duties on behalf of another person.
What Common Fiduciary Roles Might A Law Firm Handle?
Law firms often handle various fiduciary roles, including:
- Executing a will
- Managing a trust
- Serving as an agent under a power of attorney
- Serving as a conservator or guardian
These roles involve managing assets, making financial decisions and ensuring the wishes of the individual are carried out.
Why Is Choosing A Professional Fiduciary Important?
Choosing a professional fiduciary is vital because they bring experience, objectivity and reliability to the management of your estate. Professional fiduciary services help prevent conflicts of interest and ensure that your assets receive the utmost care.
How Do I Appoint A Fiduciary Through Legal Means?
You can appoint a fiduciary through legal documents. These include:
- Wills
- Trusts
- Power of attorney documents
- Advance health care directives
The documents should clearly state who you want as your fiduciary and also outline their powers and responsibilities. It is important to consult with a lawyer to ensure all legal requirements are met.
What Is The Difference Between A Fiduciary And A Trustee?
While both fiduciaries and trustees manage assets for others, a trustee manages a trust. Fiduciary services encompass a broader range of roles, including executors and agents. Trustees have a legal obligation to manage the trust according to its terms, while fiduciaries must act in the best interest of the person they represent.
Can A Fiduciary Be Removed?
Yes, a fiduciary can be removed if they fail to fulfill their duties or act against the best interests of the person they represent. Reasons for removal include:
- Breach of fiduciary duty
- Mismanagement of assets
- Conflict of interest
- Incapacity
Legal proceedings may be necessary to remove a fiduciary. Our fiduciary law attorneys can provide guidance on this process if needed.
How Are Fiduciaries Compensated?
Fiduciaries are entitled to reasonable compensation. It can be based on:
- An hourly rate
- A percentage of the assets managed
- A fee schedule outlined in the legal document
Compensation varies depending on the complexity of the fiduciary services provided.
What Legal Obligations Does A Fiduciary Have?
A fiduciary has several legal obligations. These include:
- Acting in the best interest of the beneficiary
- Managing assets prudently
- Keeping accurate records
- Avoiding conflicts of interest
- Communicating with beneficiaries
Failure to meet these obligations can result in legal action.
Can A Law Firm Act As A Fiduciary For My Business?
Yes. This can be helpful in situations such as:
- Succession planning
- Business dissolution
- Managing assets during owner incapacity
We offer trust services and fiduciary services specifically designed to meet the needs of business owners and their families.
Ask More About Our Fiduciary Services
Estate planning can be complex, but the Center for Elder Law & Estate Planning is here to help. To learn more about fiduciaries, contact us toll-free at 888-784-0864 or send us an email. We offer free in-person and virtual consultations.