When it comes to protecting your assets or passing items of value to family members, estate planning is essential. This legally binding will and testament can help to prevent ugly feuds over who gets what and ensure your final wishes are upheld.
To avoid unnecessary fighting, there are several ways you can go about the estate planning process. First, you could call a meeting with your family members and attorney present. At the meeting, you should announce the decisions made and why you want them that way. Your lawyer will also explain any use of trusts and how disputes will be settled between family members should there be a stalemate over personal property.
Another vital component of the estate planning process is the choice of a fiduciary. A fiduciary is a person or institution that has been granted power to act on behalf of someone else. This is essential for situations that require complete trust and honesty. A fiduciary can be a lawyer, accountant, business advisor, banker, financial advisor, mortgage broker or real estate agent.
When a fiduciary is hired, their job is to act in your best interest. They are not to indulge in personal motives for gain. Every fiduciary is bound to do only what is best for you, your estate and your beneficiaries. There are different types of fiduciaries, each depending on the unique context. With estate planning, you’ll need to select a number of fiduciaries to act on your behalf.
Common fiduciary roles include:
- Executor: This fiduciary will be responsible for administering your assets following the directions contained in your last will and testament.
- Trustee: The trustee fiduciary will manage all the assets named in your revocable living trust or other forms of trusts created by the guidelines listed in the trust agreement.
- Healthcare Agent: This fiduciary will take charge of your medical decisions and enact them as directed in your advanced directives.
- Attorney in Fact: This person will be responsible for managing the assets in which you are the sole owner and title holder. The fiduciary must oversee this process in accordance with the directions in your power of attorney.
You can choose to name multiple people or institutions to serve in different fiduciary capacities. Additionally, it’s a good idea to list some alternative fiduciaries in case your first pick cannot fulfill the obligation. If a fiduciary is not chosen, a court will select one for you. To avoid a court-appointed stranger overseeing your estate, planning ahead is essential.