When creating either (or both) an estate plan or a power of attorney, an important decision involves who to name as your fiduciary. By fiduciary, I mean the person who will act on your behalf under your power of attorney. A fiduciary is a fancy term for the person who will take care of your assets, real estate and personal affairs if you are unable to do so yourself. Your first reaction might be to name one of your children as fiduciary, but if you want to avoid conflict among your children, this might not be the best option.
When naming a fiduciary, be confident you can trust the individual. Trust is why people often name family members as fiduciaries. However, problems can arise when a parent with two or more children names one child as a fiduciary. According to Fredrick P. Niemann, an attorney from Freehold, New Jersey, who spoke on the issue of family harmony at a recent estate planning seminar on powers of attorney, a child is often not the best fiduciary for several reasons:
• It is hard for a child to be completely objective.
• Children often disagree over many things.
• Children often don’t communicate with each other well.
• Unresolved lifetime rivalries.
An alternative is to hire a professional power of attorney. A professional fiduciary can be a bank, an investment firm with trust administration, a certified public accountant, or a trust company. A professional fiduciary will charge a fee, but the fee is established ahead of time. In addition, because a professional is experienced in managing money and property, your assets are more likely to increase under this person’s or institution’s guidance.
To ensure that your family remains partially involved and has some input, you can include a provision that allows one or more family members to discharge the fiduciary if they feel the professional is not doing a good job. This will allow your family to make sure the fiduciary is performing properly without having the burden of acting as a fiduciary.
To discuss your NJ Medicaid matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office. We can meet to discuss your questions and issues. For further information, please go to http://www.youtube.com/user/NJElderLawCenter#p/search/3/a65_eWdihuU to learn more.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Estate Planning Attorney