Most people have two major goals in estate planning. The first is ensuring that their wishes are honored, both during their lifetime, and after. The second is reducing administrative costs. Choosing the wrong fiduciary can mean that these goals are not met. Your appointment for power of attorney and trustee means selecting the person who will control, manage and distribute assets when you are incapacitated or deceased, which makes it crucial to carefully think out this appointment. By the end of this article you will understand the importance of making the right appointment and how to go about doing so.
This is a difficult job and the appointment should be treated as such. A primary focus should be whether the candidate will have enough time to dedicate to the multitude of tasks which may emerge, the intelligence to understand the requirements of the position and the fortitude to make difficult decisions. Trustees and powers of attorneys should fully understand all the different tasks that may be required before accepting the job. These include: safeguarding assets of the estate, reviewing investments, paying bills, collecting income, accounting for all transactions, arranging and preparing for tax reporting and providing notice to interested parties and the court. A good candidate has excellent communication and organizational skills, understands insurance policies, tax and legal issues, can sleuth out information, can make sound investments and tackle health administration problems.
This is a tall order. The stakes are high for the estate owner as well as for the trustee. The highest of all duties under the law are reserved for fiduciaries. If duties are not carried out properly the fiduciary could be held legally liable even when he does his best. Also, these broad powers are easily abused. Conflict of interest among family members can create problems when trying to preserve assets or making health care decisions. The most careful estate planning is all for naught if the wrong fiduciary is appointed. That is why it is crucial to carefully think through this appointment to find the best person for the job.
Too many people choose a friend or a family member without taking into consideration whether they can really do the job. It often makes sense to engage professional estate services to ensure that the estate plan and fiduciary responsibilities are met.
