Should You Have a Professional Fiduciary to Manage Your Estate?

I speak to many clients, in detail, about who they would wish to control their property and affairs if they become incapacitated or they passed away. For clients who would not be comfortable handing this responsibility to a close family member or friend, there are two other options to consider: 1) a bank’s trust department, or 2) a licensed professional fiduciary.

Many banks have trust departments and trust officers who provide services to families, as executors or trustees. They charge for this service, usually based on the size of the trust (which can range from .75% to 1.5%). Trust departments can be “institutional” but they are generally more desirable for very large trusts or for trusts that are designed to last for decades.

A Licensed Professional Fiduciary is regulated by the State of California and is licensed to act as a fiduciary for hire. I have relationships with several professional fiduciaries. They can be extremely useful in a variety of important situations, including acting as a successor trustee.

Whether you are working with a trust department or a professional fiduciary, you should be sure to include in your estate planning documents whatever special language they might require.

Also, it is usually appropriate to add additional “checks and balances” into an estate plan that uses a trust department or a professional fiduciary. This is especially important in any long-term trust. A common enhancement is to provide the the “Trust Protector” could remove and replace any fiduciary that was no longer performing up to standards.

About Paul D. Hunt

If you're a resident of California, and a homeowner, then you should clearly put your home into a living trust. A living trust makes probate unnecessary. (We don't like to say "avoiding probate," because that's misleading!) Probate is very expensive – an average home in Alameda will require a probate fee of about $37,000. Also, probate is very slow, and it's done in public. Our law office is dedicated to getting rid of all of the estate planning myths out there, like the "avoiding probate" myth. We want every family in Alameda to enjoy the many benefits of a trouble-free estate. Come to one of our seminars, or call for a free initial appointment at (510) 523- 2100.
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