Tax Law and Business Organization Strategy

Choosing a Fiduciary-Part II of II

As you are choosing a fiduciary, it is also important to name successor fiduciaries. What if the executor or trustee you choose is unable or unwilling to serve when the time comes? What if that person is sick, deceased or incapacitated when it comes time for them to serve? What if they move far away, making it difficult to perform important duties?

As you are choosing a fiduciary, it is also important to name successor fiduciaries. What if the executor or trustee you choose is unable or unwilling to serve when the time comes? What if that person is sick, deceased or incapacitated when it comes time for them to serve? What if they move far away, making it difficult to perform important duties?

Because of the issues identified above, it can make sense to consider an institutional fiduciary, like a bank or trust company. Theoretically, a bank or trust company will be around when you need it. Additionally, the bank or trust company should have the resources to redress any errors they make. Most importantly, however, is that they have the infrastructure and processes already in place to perform their duties. Yes, they charge a fee for serving as a fiduciary, but it is often worth the price.

There are no “rules” to follow in making fiduciary appointments. The important thing is to think long and hard about these issues and then make the best decision you can based on the information you have.

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