After making a will, setting up a trust, or putting other care and estate plans in place, most people instinctively look to relations and close friends to serve as the fiduciaries who take on the responsibility for administering the arrangements. Though it can make good sense to count on family and friends, sometimes it’s wise to appoint a professional fiduciary.
Fiduciary Responsibilities
When designating an executor, personal representative, or trustee, understand that these are not honorary roles, or favors to be accepted lightly: they come with legally binding, fiduciary obligations, and generally long to-do lists related to closing out the affairs of the estate in accordance with laws and protocols. In addition to taking on tasks like selling a family home, closing out accounts, paying bills, and so on, the relations and friends placed in fiduciary roles are also quite likely to be grieving, as well as juggling their own life responsibilities. All in, as attorney Sheila Buckley points out, it can often make good sense to consider appointing a professional fiduciary:
A Trustee or Executor (sometimes called a Personal Representative) is the person responsible for gathering and distributing your assets after you pass and settling your final affairs. In some cases, this person also may be responsible for managing assets held in trust for your beneficiaries for a certain period of time. Although this may sound simple enough, depending on the nature of your assets, these tasks can be time-consuming, complex, and require a high degree of financial sophistication. While many people select friends or family members (often adult children) to serve in this role, for some people it makes more sense to appoint a professional fiduciary. A professional fiduciary is a company, bank, or individual, such as an accountant, who specializes in serving as a trustee or executor. These professionals have years of institutional experience administering estates and have the staff and resources to manage long term trusts.
Although paying for the services of a professional fiduciary may seem unnecessary or even extravagant, consider that in the long run, the fee, which can be contracted as a set amount, or calculated as a percent of the estate value, may turn out to be well worth it, and result in saving both money and time. Estate planning experts share these three examples of circumstances that may make it particularly beneficial to secure professional fiduciary services:
- Complex family situations with potential for conflict over distributions. ….Professional fiduciaries are impartial and have experience navigating complex family dynamics and have experience navigating complex family dynamics to minimize conflict.
- Holding assets in trust for a beneficiary with substance abuse problems. …The trustee must decide whether to distribute assets directly to the beneficiary or make payments on the beneficiary’s behalf to third parties…and objectively assess the beneficiary’s mental status and financial needs. Professional fiduciaries have experience handling these issues.
- Holding assets in trust for an extended period of time, such as for minor children or others who lack…money management skills. Selecting a competent trustee is particularly important for parents with minor children or anyone leaving assets in a long-term trust. The trustee will be responsible not only for making distribution decisions but also for actively managing and investing the trust assets for many years ….
Fiduciaries and Fiduciary Bonds?
No estate or care plan is complete without the appointment of the fiduciaries entrusted to carry out the decisions and arrangements reflected in the plan. Depending on location, circumstance and the details of plans, fiduciaries may be referred to by a variety of specific names, such as personal representative, trustee, guardian or conservator. Underlying the details and tasks each of these fiduciaries becomes responsible for, is a legal obligation to put the affairs of the estate and its beneficiaries ahead of personal interests. Fiduciaries must always carry out their duties with loyalty, care, good faith, confidentiality and prudence. Because all fiduciaries have significant, legally binding responsibilities, a type of bond, generally referred to as a fiduciary bond may be required. A fiduciary bond serves as a guarantee that duties will be carried out in accordance with the law, and in the best interests of beneficiaries.
Colonial Surety makes it easy and speedy for fiduciaries in every state of the country to obtain their bonds. Simply: get a quote online, fill out the information, and enter a payment method. Print or e-file the bond from anywhere.
Obtain Digital Fiduciary Bonds HERE
Bond Solutions for Professional Fiduciaries
When families turn to you for guidance and peace of mind, your time is of the essence. That’s why we put digital fiduciary bonds at your fingertips via The Partnership Account® for Professional Fiduciaries. With this online platform from Colonial Surety, you’ll get off to a quick, efficient and excellent start with every client:
- Access our library of instant, digital fiduciary bonds, including: guardian, conservator, executor, personal representative, administrator, trustee and more.
- Secure precisely the right bond for every circumstance, in every state of the country, every time a bond is needed.
- After selecting the needed bond, just enter payment, and download. That’s it–get back to the essential duties of your day.
As direct, national bond writers, Colonial Surety Company is pleased to back you up, so you can stop wasting time on bond searches, applications and processing delays.The work of every professional fiduciary deserves a great partner. We’re here to help:
The Partnership Account® for Professional Fiduciaries.
Colonial Surety is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed, and licensed for business everywhere in the USA. Our customers have awarded us a 4.8 Trustpilot score.Whenever and wherever you need a bond, trust Colonial: www.colonialsurety.com