What is a Fiduciary and How do I Pick One?
A fiduciary is a fancy catch all word for personal representative (which is another way of saying executor, executrix or administrator, administratix), guardians, agents, and trustees who are all subject to the jurisdiction of the Orphans’ Court in Pennsylvania. Orphans’ Court: what is that and how does it apply to me? Unlike Criminal or Civil Court, Orphans’ Court is a court of protection. The court acts as a protector and supervisor of the rights of those who cannot protect themselves. This means the court has jurisdiction over things like guardianships, will contests, adoptions, power of attorney issues, and a myriad of other things. They can keep an eye on agents to ensure they are acting within their fiduciary duties. Fiduciary duties vary depending on the particular fiduciary position a person holds, however the basic tenants are to act honestly and in the best interest of the person or estate you are acting on behalf of or for. A lawyer can best advise you as to what the exact description of your fiduciary duties are if you ever find yourself in that position. Acting as a fiduciary is a big responsibility and not one to be taken lightly. So how should you go about selecting someone to act on your behalf?
First, understand the role you are asking someone to fulfill. Not all fiduciary positions are created equal and may require different skill sets that may not be possessed by one person. Second, understand your prospective fiduciary’s strengths and weakness. One person might be a great health care agent for you but not the best person to act as your trustee. If you have a child that is great with making decisions under pressure but not so good with money, you probably do not want them acting as your financial power of attorney. However, that child might be great as your health care agent. Third, do not select someone simply because they are family. Make sure the person can handle what it is you are asking of them and ensure they want the responsibility. You might have a dear friend that would be a better choice. Finally, you know your family and friends best. You are in the best position to make these decisions. Rely on your attorney for guidance on what to look for in a good fiduciary, but do not rely on them to make the decision for you.
After you have made the decision and named your fiduciaries, please be sure to inform them of your choice. You should discuss your expectations and explain why you have confidence they are the right person for the job. Any discussion and guidance you can provide ahead of time may help to clarify your wishes if they are called upon to act as your fiduciary.
Lindsay Schoeneberger is an attorney at Russell, Krafft and Gruber, LLP in Lancaster, Pennsylvania. She received her law degree from Widener University School of Law and practices in a variety of areas, including Estate Planning.