You need a professional fiduciary if you have an estate plan. A compilation of statistical resources reveal that anywhere between 66-80% of Americans do not have an estate plan. Besides our natural denial that we are mortal, other reasons can cause procrastination in setting up our formalized plans. Without an estate plan, specifically a living trust, your assets will likely be subject to probate. Probate is an expensive, time-consuming, legally demanding process as compared to having a trustee administer your trust estate. Fees for probate are statutory and non-negotiable. Even if you do have an estate plan you may wish to update it and rename a professional to assist you during life and administer your estate after you leave the planet.
So, what are the obstacles to establishing or updating an estate plan? Some folks are adverse to the upfront costs of setting up a complete estate plan which, unlike the old days gone by, not only includes a will but a living trust, power of attorney for health and a power of attorney for business and finance. The cost of a complete estate plan preparation and administration versus probate costs is a bargain. Some people delay because think that planning is going to be a long exhausting process. A good Legal Documents Assistant, at your direction, can help complete a simple estate plan for a fraction of the cost of an attorney and in a day or two, not weeks. Much of the same information will appear on all the documents and is easy to populate once you answer a few easy questions.
What else stops people from proceeding with an estate plan? Some people get stuck on who to name in their estate documents to speak for them when they can’t, to pay their bills if they are unable and who to trust to carry out their wishes. Traditionally that role has gone to a spouse, child or relative. But are these people the best people for the job? And job it is. Unfortunately, a spouse or partner will likely be aging as fast as you are. Gone are the days when children lived nearby and could be on call. If you name only one child on your trust to be a successor but you have other children, this selection will create immediate jealousy, rivalry, and mistrust between the other children. Better for family harmony to engage a fiduciary.
If you name two or more of your children as co-trustees, this slows the process considerably and many banks do not accept this form of administration. Children may live far away, making it impractical for them to show up for Drs. Appointments or make other geographical and logistical arrangements for your health. Children are often busy raising their own kids and building their careers. Even children who have all the time and energy to devote to you may lack the practical and legal expertise to effectively manage your affairs without a misstep. Unfortunately, some children may have mental or addiction issues which prevent them from putting your needs before theirs. Lastly, many folks do not have children at all! A fiduciary can fill this role.
What is needed is a professional kid. One who is licensed, certified, insured, and perhaps even bonded. This person can be named on all estate planning documents and step in when specifically asked to do so or when a triggering event occurs. In California this person is called a private licensed fiduciary.
In California, a private licensed fiduciary is an individual or entity voluntarily named in an estate plan or appointed by the court to act on behalf of another person to manage their financial affairs, personal care, and as a successor trustee and executor. California is one of the few states that require licensing for fiduciaries. To qualify to become a fiduciary you must be educated, experienced, pass a difficult exam and maintain continuing education.
These fiduciaries play a crucial role in situations where individuals are unable to manage their own affairs due to various reasons such as incapacity, disability, or absence. They might step in to manage financial matters like paying bills, managing investments, and handling taxes, as well as personal matters like healthcare decisions and living arrangements are all regular duties that a fiduciary can perform.
Here’s why a private licensed fiduciary is important and necessary:
Expertise and Professionalism: Private licensed fiduciaries are typically trained and experienced professionals in areas such as finance, law, and social work. They bring a level of expertise to managing complex financial and personal affairs that the individual or their family may not possess or have the time to deploy.
Court Oversight: In California, when a private fiduciary is appointed by the court, the court retains jurisdiction over the fiduciary and client. This oversight helps ensure that they adhere to legal and ethical standards in their conduct and decision-making.
Objective Decision Making: Fiduciaries are bound by ethical and legal duties to act in the best interests of the person they represent. Unlike family members who may have personal biases or conflicts of interest, fiduciaries make decisions objectively, prioritizing the well-being of their clients.
Consistency and Continuity: Private fiduciaries provide continuity in managing affairs, which is especially important in cases where the individual’s needs are ongoing or where family members may be unavailable or unable to fulfill the role consistently.
Relief for Family Members: Acting as a caregiver and managing someone else’s affairs can be emotionally and physically taxing for family members. Private fiduciaries can alleviate some of this burden by taking on the responsibilities of managing finances and obtaining personal care and respite.
Conflict Resolution: In situations where there are disputes among family members regarding the management of a loved one’s affairs, a private fiduciary can serve as a neutral third party to resolve conflicts and ensure that the individual’s best interests are upheld.
Overall, private licensed fiduciaries play a crucial role in safeguarding the interests and well-being of individuals who are unable to manage their own affairs, providing expertise, objectivity, and continuity in decision-making. Make your best laid plans even better by incorporating a Private Licensed Fiduciary in your estate plan.
Next time we will share how to select a fiduciary that is a good fit for you!
Ready to secure your future and ensure your life and estate is managed according to your wishes? Don’t delay any longer. Contact Paladin Fiduciary Services, LLC at www.paladinfiduciary.com to schedule an appointment. Whether you’re establishing your estate plan for the first time or looking to update it, partnering with a professional fiduciary can provide you with peace of mind. Let us assist you near or long term, guiding you through the process and ensuring your assets are handled with care. Take the first step towards a secure future— reach out to Paladin Fiduciary Services, LLC today.
