Tuesday, August 16, 2011

What is a Private Professional Fiduciary?

A fiduciary is a person who assumes responsibility for a position of trust.

License requirements and oversight of Calif Fiduciaries: Private fiduciaries are governed by state statute. We are required to meet specific experience & education requirements as well as maintain annual continuing education requirements.

Specific Roles a Fiduciary may perform:  Trustee, Successor Trustee, Conservator, Guardian. Power of Attorney for Health Care or Financial duties, Special Needs Trust Trustee. We perform trust administration and asset distribution upon the death of the trust creator. A professional fiduciary may also act as trustee during the trustor’s life if the trust creator has diminished capacity to perform duties.

Why use a professional Fiduciary?  Sometimes the family does not want the responsibility or may not be capable of taking on the demands of a fiduciary role. The family member may not want to assume the risk and liability associated with being a trustee. In some cases there’s no family or friends to take on this challenging role. A qualified, properly trained professional third party can mediate and often times neutralize family conflict if it exists. A private professional should provide a more personal working relationship than a corporate trustee, such as a bank.

Fiduciary Responsibilities: There are many responsibilities (see blog article for more description). Annual accountings are one very important responsibility that often get’s overlook when a family member, non-professional is acting a trustee. This can be the cause of strife between the beneficiaries. The trust assets must be strictly used as designated in the trust document. Transparency of how trust assets are being spent is critical for all beneficiaries. No comingling of funds.

Selection of a Trustee or Successor Trustee: When preparing estate planning documents, the creator/trustor selects a successor trustee, and a POA for health & financial matters along with an executor of the will. When choosing who will act as trustee, or successor trustee, your choices include: selecting an inexperienced family member, a corporate trustee (bank), or an experienced, trained private professional fiduciary.

Norris Fiduciary Services has extensive financial services background which proves to be an advantage when serving clients and managing financial assets in the trust. When selecting a private professional be sure they hear and understand what your needs are, that they are good listeners and communicate well with you. A private fiduciary also needs a business succession plan.

Conservatorships:  Are always court appointed and are required if someone can’t care for themselves and has no power of attorney document appointing an agent. A Fiduciary may be the conservator of the person or of the estate. (See blog article on conservatorships).

Power of Attorney for HealthCare: Can be put in place if the person doing their estate planning has the mental capacity. The Fiduciary would act as the health-care agent to carry out &/or make healthcare decisions specified in the health care directive.

Power of Attorney for Finance:  Same as above, except the agent manages all or specifically designated financial matters for the person creating the document. The Fiduciary would begin performing duties only when the individual was unable to because of diminished capacity.

How is a Fiduciary appointed:  Anyone who believes a person may need help with activities of daily living (ADL’s) and/or financial management can initiate the process to appoint a private fiduciary. The attorney may suggest that a private professional be used when doing the estate planning. If you have a loved one who needs assistance, we can offer guidance.

Cost:  Fiduciaries are private professionals and our fees are paid for directly from the trust assets. In my practice I require a meeting with the prospective client or family member to do an assessment and discuss services that they may need. I provide a written fee schedule which will need to be signed. My fee agreement outlines the scope of services I would be providing.

For more information please contact: Nancy Norris –

Norris Fiduciary Services  408 294-5390

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