Choosing Fiduciaries

The term fiduciary is from the latin fiducia, meaning "trust," a person who has the power and obligation to act for another (often called the beneficiary) under circumstances which require total trust, good faith and honesty. The most common is a trustee of a trust, but fiduciaries can include, attorneys, guardians, administrators of estates, or anyone who undertakes to assist someone who places complete confidence and trust in that person or company.

When choosing a person or institution to serve in a fiduciary capacity some key criteria are:

• The competence and experience of the fiduciary
• The willingness and ability to administer the details of the responsibility
• The expertise to manage the assets involved
• The permanence and reliability of the fiduciary

An executor, also called a personal representative, is responsible to faithfully administer the estate of a decedent according to that individual’s wishes communicated through their last will and testament and any letters of instruction. As a fiduciary appointed by the court, a personal representative (or executor) is held to a strict standard in collecting your assets, paying your debts and distributing remaining assets to beneficiaries as specified in your will. Executors are required to have-or acquire-knowledge of the law, accounting, special tax requirements, recordkeeping and, in cases where distribution wishes are disputed, mediation skills. With many things to do and a limited time to complete them during the probate process, a personal representative should always be on duty and not be influenced by other pressures such as sickness, grieving, other business interests or personal relationships with beneficiaries.

A guardian in New York is named guardian of the person and guardian of the estate of the person. The guardian of the person is responsible for the personal care of the individual. Food, clothing, lodging, health care decisions, for example are handled by the guardian of the person. The guardian of the estate serves as the business manager of the assets of that individual. Guardianships can be either court supervised or not, depending on the circumstances.

A trustee is the manager of property held in trust. When choosing a trustee, one needs to know that the trustee will be ready to serve when called upon. An individual – a relative, a friend, or a financial advisor may serve as long as that person has reached the age of majority and is not legally disqualified from serving. Or an institution may be chosen as a professional fiduciary. A trustee’s exact powers and duties will depend on the instructions in your trust agreement. But in general, a trustee will:

• Hold trust property
• Invest the trust assets
• Distribute trust income and/or principal as directed in the trust agreement
• Make tax decisions concerning the trust
• Keep records of all trust transactions
• Issue statements of account and tax reports to the trust beneficiaries
• Explain the trust’s operation to beneficiaries
• Answer any questions the beneficiaries may have concerning the trust
• Make reports to the probate court when necessary

Visions Estate and Trust Service has the competence, expertise, experience, permanence and reliability to serve as an excellent professional fiduciary. We also offer Agent for Personal Representative, Agent for Trustee, and Directed Trustee relationships that allow individuals to serve as fiduciaries, with Visions assisting on the technical responsibilities.

Trust services provided by MEMBERS Trust Company.

Website content provided by FORUM 1st Trust Services, used with permission. Copyright @ 2004 Forum Credit Union. All Rights reserved.

Important Note: Trust products are not federally insured, are not obligations of or guaranteed by the credit union or any affiliated entity, involve investment risks, including the possible loss of principal.