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The Roles of a Fiduciary (Part 2)

Updated: Jul 14

In our previous blog, we discussed how the role of the fiduciary is vastly important and must fulfill the duty of care, the duty of loyalty, and the duty of faith. We talked about the Fiduciary as Executor or Trustee and the Fiduciary as Health Care Agent.


In this blog, we'll discuss Fiduciary as Attorney or Agent, as a Pre-Need Guardian, and as Guardian for Minor Children.


Attorney, Agent, or Attorney-in-Fact


Lawyers in all areas of practice are considered fiduciaries. Their fiduciary responsibilities and code of ethics are among the most ironclad and are handed down by the U.S. Supreme Court. To some extent, they're even covered by the U.S. Constitution. What you say to your lawyer stays with your lawyer in most cases.


Unlike an executor or a trustee, an attorney's fiduciary obligation is to you, not your beneficiaries. The attorney's role is to protect you and your estate and to ensure that they follow your wishes in the documents that provide for them, such as your will.


An attorney-in-fact, sometimes called your agent, is responsible for managing assets that are titled in your name. They act following directions that you've included in a power of attorney. It can be one or more individuals, institutions or both.


Pre-Need Guardian


This individual is responsible for taking care of you and your property if the court determines that you're mentally incompetent and in need of someone else to manage your affairs. This would be the case if you did not have a revocable living trust—a successor trustee would need to step in for you.


You can designate this fiduciary in a free-standing legal document called an advance medical directive or in a medical or financial power of attorney.





Guardian for Minor Children


This fiduciary is responsible for taking care of your children if you die while they're still minors. You can designate this individual in your last will and testament.


In some cases, you might want to name the same person to serve as fiduciary in all your estate planning documents. For example, if you're married, you might name your spouse in all capacities. Otherwise, you might decide to name different people or institutions to serve in various capacities.


These are big decisions and should be discussed, in advance, with those you choose to fulfill those roles.


Planning for the Future


As with any important decision in your life, it's critical to plan accordingly. You can begin preparing by consulting with a fiduciary whose role is appropriate for your need. Be informed.


Consult with your family members, especially those who will be involved and affected by the decisions you're making. What do you do if someone you've chosen doesn't want to carry out your wishes when you die. It's probably best to discover that long before you're gone. You'll want to have an alternative, the right person in place.


If your choice isn't available or doesn't want to carry out your wishes when you're gone, a court will appoint someone for you.


The Final Word


In short, choosing the right fiduciary (the entity with the power and legal obligation to act on behalf of another in situations that require trust, honesty, and loyalty), is critical. The team at AD Fiduciary will do just that. They must take the utmost care to act in the best interests of the party who has delegated this responsibility. And they will.

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