When you create a trust, you’re not just thinking about the property you’ll place inside of it, but who will be responsible for managing it. This person is known as the trustee and they hold an important fiduciary duty to act on behalf of the beneficiary’s best interests.
A fiduciary is a person who has a legal responsibility to handle your assets and money with care. It is a primary concern for anyone approaching the estate planning process to find a credible and honest fiduciary. Most people who are selecting someone to serve in the role of trustee, which is the most common example of fiduciary, want to ensure that their assets are protected as much as possible so that the vast majority of assets go on to beneficiaries rather than being spent in administrative fees.
Fiduciaries are professionals who are held to a higher standard and must make recommendations about what to do with the assets based on what is in the best interests of a client. While you can choose a family member to serve in this role, it’s important that your trustee be clear about the expectations.
Many people turn to experienced estate planning lawyers or financial planners to serve as fiduciaries of trusts when necessary. This can be a good route to go if you do not know someone who has the necessary legal and financial expertise or comfort level in taking over management of your assets.
Given that this person is held to a higher standard legally to act in your best interests, beneficiaries of your estate could theoretically bring a legal claim against this person if they act outside of the boundaries of that role. Schedule a consultation today with an estate planning lawyer in Maryland to learn more about how to decide on a fiduciary.