People establishing estate plans have to make many difficult decisions. They have to decide who should inherit from their estate and how to handle their responsibilities after they pass. They typically also need to select individuals to hold positions of authority.
People with minor children may need to appoint a guardian to take over their parental responsibilities should a tragedy occur. Most people also need to consider who oversees estate administration when they die.
Many testators select someone they personally know and trust to handle estate administration. However, some testators choose to hire a professional fiduciary instead of relying on a friend or family member. What inspires individuals to nominate a professional to act as their personal representative or trustee?
A lack of viable candidates
For some people, a small inner circle could be the reason that they hire a professional fiduciary for estate and trust matters. Their closest friends and family members may live across the country or may have medical issues that could prevent them from fulfilling estate responsibilities. In situations where a testator worries that the people they trust may struggle with estate or trust obligations, they may choose to bring in a professional fiduciary.
Concerns about conflict
In some cases, people putting together estate plans worry about the dynamics among their loved ones. For example, they may not want to appoint one of their children as their personal representative or trustee because they worry that the position could strain that individual’s relationship with their siblings. Those who believe that prior conflict within the family might boil over during trust or estate administration may decide to bring in a professional to manage their affairs.
Indefinite support needs
Perhaps an individual needs to establish a trust that can oversee their business for years while ensuring no one sells the organization to a private equity firm. Maybe the goal of estate planning is to provide for multiple future generations of family members.
A single individual is unlikely to have the longevity and health necessary to fulfill those expectations. A professional fiduciary can appoint a successor who takes over their responsibilities when they die or retire, allowing for a testator to arrange for a long-lasting legacy.
There are many circumstances wherein a professional fiduciary could be a viable option. Considering every potential solution can help people overcome estate planning challenges.
