Prior to choosing a fiduciary, there is one important consideration for all people, not simply the childless and single among us. That is, of course, an estate plan. The best way to ensure that your nominated fiduciary can execute your wishes, is to craft a will, trust, or other instrument that clearly lays out those wishes. Instruments to consider include not only wills or trusts, but also health care proxies and Medical Orders for Life Sustaining Treatment (MOLST) forms.
1. A Friend
If you choose to nominate a friend as a fiduciary, you must ensure that such a friend is willing and able to perform as a fiduciary. This person should know their fiduciary duties, be intimately familiar with the goals and written terms of your estate plan, and should know how to locate your will, trust, or other instruments. If you choose to nominate this friend as a healthcare agent, ensure that the friend is familiar with your wishes for your healthcare and can carry out those wishes, particularly for end-of-life care. You must also ensure that your friend knows that being nominated as a fiduciary will carry with it certain obligations and may in fact be a long-term commitment, particularly if this person is nominated as a trustee.
On one hand, if you chose wisely and nominating a friend goes well, your friend can serve as personal representative or trustee with a minimum of cost and difficulty. Your friend can probate your estate or administer your trust in accordance with your wishes and their fiduciary duties, no one will contest their administration, and they will be proud and happy to serve. On the other hand, there are a range of ways that nominating a friend can go poorly. Your friend may not be familiar with their fiduciary duties and may make mistakes in probating your estate. You may have nominated your friend ten years ago and that friend and you had a falling out in the interim such that your friend refuses to serve or accepts the nomination and intentionally chooses not to follow your estate planning wishes. Your parents or more distant family may contest the nomination of your friend, tying up your estate in probate for years.
If you have a small estate or a simple estate plan, a friend can be a cost-effective fiduciary. If you choose to nominate a friend, ensure that you have spoken about your wishes and that your friend is thoroughly familiar with them. Lastly, be sure to keep your nomination current, particularly if you are a person who tends to go through friends or if your nominated friend is older or sicker than you.
2. A Professional
Another option is to nominate, appoint, or hire a professional fiduciary. Should you choose the right fiduciary, this option will ensure that the estate or trust is administered according to a professional’s fiduciary duties and responsibilities and should help prevent waste, mismanagement, and other issues with the estate. A professional fiduciary can be an attorney, a banker, a trust company employee, or even an accountant. Such a person will charge a fee, which can be pre-arranged by the decedent such that a person’s heirs or beneficiaries need never incur additional costs. You can even nominate a professional to serve as a healthcare agent or other fiduciary, should you so choose.
A potential drawback to nominating a professional fiduciary is the expense to the estate or trust. A professional fiduciary will charge a fee for probating the estate or administering the trust. However, these fees are required by statute to be reasonable and the right professional fiduciary should ensure that the fees are not excessive. Another potential drawback is that not all professional fiduciaries are created equal and the wrong fiduciary may commit misconduct. If you do choose to retain a professional fiduciary, interview that person carefully to ensure they are the right person for the job.
3. Minimizing the Need for a Fiduciary
Within your estate planning, you can obviate the need for a fiduciary. Consider whether your assets are probate assets or non-probate assets ). If you have mainly probate assets, consider transferring to non-probate assets or designating beneficiaries, if permitted by the account or institution holding the assets. Alternatively, you can transfer title to certain assets to others during your lifetime, reserving a life estate for yourself as appropriate.
In conclusion, being single and/or having no children are not obstacles to finding someone to properly administer your estate or trust or fulfill other fiduciary roles. While there may be fewer obvious nominees to serve as fiduciaries, there remain a number of available options. Consult with an experienced estate planning attorney, such as those at Burns and Levinson, to evaluate options that may be right for you.
