Selecting a Fiduciary


Hello. This is Richard Morgan at Morgan and Disalvo. Another in our Back to the Basics video series. This is a very important topic, choice of fiduciaries. Fiduciaries are someone who’s in charge of different aspects of your estate plan.

There is the financial power of attorney agent, the one who helps you handle your financial affairs if you need assistance while you’re alive. There’s the executor of your estate … Handles that probate process, relatively short-term process. Then, you have a trustee. It’s more of a long-term, handling financial matters and a long-term basis.

Then, you have two non financial, potential fiduciaries. One is your agent, under your advanced directive for healthcare. That’s the person that helps you with your doctors and hospitals, and all those kinds of healthcare related issues. The other is a guardian. If you have minor children, under age 18, no parent is living, that’s the person who will be the quasi parent for them until they’re an adult.

Now, let’s go to the financial professionals, financial fiduciaries. The agent and a financial power of attorney, the executor, and the trustee. Who should you choose? We start out with individuals. You should only choose an individual if you have the perfect person to do it. I lean towards individuals, but only if they’re the right person.

What is the right person? They are honest and trustworthy beyond any doubt whatsoever. There’s no question at all that they will do the right thing. It’s to their core, they could not do otherwise. Number two, they are responsible. They don’t have to do everything themselves, but they’re responsible to figure it out. They go hire professionals, whatever they need to do. They’ll figure it out, and then get it done. Then, there’s not too many conflicts of interest.

You have examples such as one sibling telling another sibling what they can do with their assets. That may cause dysfunction. We like to avoid that if we can. We don’t have to. It depends on the family and the situation. That’s an individual. You have the perfect person. That’s great.

Sometimes they ask, “Wait a second, I have the perfect person in California, but my other,” let’s say one child’s in California, the perfect person. This child is local. “Should I pick the local one?” I say, “Nope. First, you go to the perfect person. I don’t care where they live. I don’t care if they live in Japan. We’ll figure it out. Then you go local.” If they’re equal, you go local. If they’re not equal, you go to the better fiduciary.

If you have a great individual, great. If you don’t, that’s when you go to a trust company. Trust companies can be trusted. They will be around, with the power to move and replace them if they go off the rails. We can deal with that. You go with the individual if you trust them, but without any doubt. If you don’t, you go corporate.

Richard Morgan. Morgan and Disalvo.

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