Building wealth can be a lifelong journey, but there’s no set age for an individual to begin planning for their retirement or for the long-term protection of their assets and wealth. Depending on your age and experience, you may or may not be familiar with the roles and functions of estate planning. There are many important elements to a living will, trust, or estate plan, and one very important element is the fiduciary. The fiduciary is the person that controls or manages assets for another party. Typically, the fiduciary and the person who owns the assets share some type of familial, commercial, or ethical relationship. The assets held by the fiduciary are usually money, real estate, business assets, or other property.
Fiduciary is a term very commonly used when discussing drafting wills or other estate planning matters. Understanding the role of the fiduciary is critical because the fiduciary is the party with the most responsibility. The fiduciary is placed in charge of handling assets and must consider the interests of all parties with interests in the asset they are managing. There are occasionally some instances where a fiduciary will face some external or internal conflicts of interest while handing assets. For instance, if an individual is named an executor in a will, he or she becomes both a fiduciary and a beneficiary. While this can result in some conflict of interest, it is not prohibited by law and can be navigated with the right legal resources and support. Having an experienced estate planning attorney can help provide advice and resolve conflicts in fiduciary interests.
Other helpful information to know about fiduciaries:
A good way for fiduciaries to minimize conflicts in estate planning is to maintain open and honest communication with all parties involved. Keeping records of documents and changes is also a good idea. Doing this allows all parties to be kept informed and reduces the likelihood of suspicion or mistrust in the handling of assets. Being a fiduciary is an important responsibility, and individuals in this position should seek to do the right thing when making decisions. When the right option isn’t clear, legal counseling from an experienced estate planning attorney is a wise solution.
When planning for your estate, choosing your executor for your will is a decision that should not be made lightly. This individual will become responsible for your assets and representing your interests on your behalf. Becoming a fiduciary can be challenging and stressful due to the commitment that is required and the responsibility that is demanded. Fiduciaries can be held personally liable for breach of their fiduciary responsibilities, so make sure you select someone who is both trustworthy and capable of successfully carrying the position.
Akin Law is a DeLand, Florida law firm committed to assisting families with estate planning issues, including wills, probate, and fiduciary counseling. For more information on how our firm can help you, contact us at 386-271-4740 to schedule a consultation.