Consider this scenario: Shortly after graduating from college, Ross and Carol get married. After having one son together, they divorce. Years later, Ross remarries and he and his new wife Rachel have a baby girl. Ross then passes away, leaving his entire estate to Rachel. When Rachel passes, Ross and Rachel's daughter will inherit everything. But what about Ross and Carol's son? What will he get?
A fiduciary is a person that has been given the responsibility to act on behalf of another in matters that require great trust, honesty and loyalty. These individuals are hired to act in your best interest and must set aside their own personal motives in favor of your goals.
Fiduciaries can serve in a variety of roles, for example, when it comes to Estate Planning, you select a variety of fiduciaries to act on your behalf, such as Executors of your Will, Trustee of your Trust, and Agent or Atttorney-in-Fact for your power of attorney documents. Fiduciaries are also court appointed guardians, conservators and personal representatives of estates.
Many choose a fiduciary adviser to handle those important duties. This might seem like an involved task for plan sponsors, but proper preparation can significantly simplify the undertaking.An adviser manages the retirement plan in the best interest of its participants — minimizing fiduciary risk, implementing an investment management process, monitoring all plan fees and developing and maintaining an education program.
WHO NEEDS A PROFESSIONAL FIDUCIARY?
It is said that there are 26,000 “orphan” seniors in San Diego alone. And many seniors with family choose to appoint a Professional Fiduciary to avoid burdening family members. Even the most capable adult child is frequently fully committed to work and home responsibilities and may not live conveniently nearby. And, of course, many family members would not be a good choice for fiduciary work due to the lack of appropriate skills or the potential for conflict with siblings or other relatives.
It is always a great idea to plan for the future, and one way your family can start is by having family meetings and discuss a caregiving plan to make sure that an aging parent is as safe as possible for as long as possible. Amy Goyer, AARP’s Caregiving Expert. Ms. Goyer says, “Whether you are caring for a family member or a friend after a hospitalization or health crisis, or you’re gradually increasing support over time, you’ll have less stress and more success if you create a caregiving plan for yourself.” She suggests that a simple plan gives you practical information, a framework and prospective which raises your comfort and confidence as a caregiver. From an article by Ms. Goyer on the AARP website, here are some key components to include in your plan: