Choosing your fiduciaries is one of the most important parts of an estate plan, and often one of the hardest. It means picturing a time when you cannot act, and asking who you would trust to act for you.
A fiduciary is a person or organization you trust to manage your affairs and make decisions for you when you cannot. Most people choose family members or close friends. Sometimes a professional, such as a bank or trust company, is a better fit.
This article is a guide for thinking it through. If you are on the Fiduciary Choices page now, this article explains each question on it.
Each role is a different job
The roles in an estate plan make very different demands of a person. Someone perfect for one may be the wrong choice for another.
| Role | How long it may last | What it asks of the person |
| Health care agent | Possibly days or weeks, in a crisis | Stays calm under pressure, can talk with doctors, lives close enough to be there, and will honor your wishes even when they are hard. With no one suitable, some people name a professional patient advocate. |
| Financial agent | Possibly years, while you are living but unable to manage | Honest, organized, and comfortable paying bills and dealing with banks |
| Personal Representative | Usually months, sometimes a year or more | Organized, patient with paperwork and deadlines, and able to stay fair with family |
| Trustee for children or grandchildren | Possibly decades | Good judgment about money, young enough to see it through, and willing to say no |
| Guardian of minor children | Until the children are grown | Shares your values, has the energy and home life to raise your children, and loves them |
That is why many people name different people for different roles. The sibling who is wonderful in a hospital may not be the one who should manage a trust for twenty years.
What a Personal Representative actually does
It helps to picture the job before you ask someone to take it on. After a death, a Personal Representative usually:
- Finds the original Will and the important papers
- Opens the estate with the court, if probate is needed
- Notifies heirs and beneficiaries
- Gives notice to creditors, then waits out the claim period, which is four months in both Washington and Oregon
- Lists and values everything the person owned
- Keeps property safe, manages accounts, and may sell a house or car
- Pays valid debts and files final tax returns
- Keeps records of every dollar in and out
- Distributes what is left and closes the estate
Even a simple estate usually takes six months to a year. A Personal Representative can hire an attorney and an accountant to help, and the estate normally pays for that help.
Qualities to consider
No one will be perfect. These qualities give you a framework for weighing your options.
Trust and integrity
Trust is often the most important factor. A fiduciary may have access to your property and private information. You want someone you trust to act honestly and carry out your wishes, not their own.
Judgment and fairness
A fiduciary may make decisions that affect several people. It helps if the person can stay objective and follow their legal duties rather than personal feelings or family history. This matters most when beneficiaries disagree.
Comfort with money and paperwork
For financial roles, the person should be comfortable with accounts, bills, records, and deadlines. They do not need to be an expert, but they should be willing to ask for professional help.
Time and willingness
Serving can take real time over a long period. Choose someone who is both willing and able. Living nearby helps for a health care agent, but financial roles can often be handled from far away.
Age and health
Think about whether the person is likely to be able to serve when needed. For long roles, such as a trustee for young children, someone from the next generation may be a better fit than someone your own age.
Compensation
Washington and Oregon law generally allow fiduciaries to be paid. In Oregon, a Personal Representative’s fee follows a schedule in state law, based on the size of the estate. Some people serve for free, especially family. Others expect payment for a role that takes significant time. It is worth talking about.
Common mistakes
These choices are understandable, but they often cause trouble later.
Co-fiduciaries usually have to agree. If they do not, decisions stall and relationships can suffer. Naming one child, with the others as alternates, is often kinder. You can treat your children equally in who receives what, without making them share the job.
Birth order says nothing about who is organized, available, or good with money. Choose the person best suited to the role.
It can work, but it places a heavy load on one person and leaves no one to check their work. Consider spreading the roles.
If your first choice cannot serve, a court may have to decide who does. Name at least one backup for each role.
The person may not want the job, or may not be able to do it. Ask first, so your plan does not fail when it is needed.
If you name a married couple to serve together, think about what happens if they divorce or one of them dies. Your attorney can help you word this.
Can a beneficiary also serve?
Yes, and it is common. In a revocable trust, you are usually the trustee and a beneficiary during your life. After a first death, the surviving spouse often keeps serving as trustee of a joint trust. An adult child often serves as trustee after both parents die, even when there are other children. A parent may also set up a trust for a child and name that child as trustee.
What matters is whether the person can treat everyone fairly, including beneficiaries other than themselves.
Ideas for blended and complicated families
- Split the roles. One person handles health care decisions, another handles money.
- Pair a family member with a professional. A relative who knows the family serves alongside a bank or trust company that handles investments and records.
- Choose a neutral person when your children and your spouse may disagree, rather than asking one side to manage property for the other.
- Use a professional trustee for a trust meant to last many years, or where there is significant property to manage.
Considering a professional fiduciary
Professional fiduciaries include large banks, regional trust companies, independent professional trustees, and some attorneys and other professionals.
Possible benefits
- Experience with investments, taxes, and trust administration
- Objectivity, because they are outside family relationships
- Oversight, because they are usually regulated, follow set procedures, and keep detailed records
- Continuity, because an institution keeps serving even when its staff change
- Help under one roof, since many have attorneys, accountants, and investment managers on staff for one overall fee
Possible drawbacks
- Cost. Independent trustees may charge by the hour, while banks and trust companies often charge a percentage of the property they manage. Some require a minimum amount before they will serve.
- Less personal knowledge of your family’s relationships and values.
- Less flexibility, because institutions follow formal policies.
- Cautious investing. A professional may invest more conservatively than you would. Some decline to hold property that cannot be spread out, such as a family business or a single rental house.
Talking with the person you want to name
A short conversation now can prevent confusion later. You might:
- Explain the role, and why you thought of them
- Ask honestly whether they are willing and able
- Tell them where your documents will be kept
- Share what matters most to you, such as how you want your children raised or how you feel about life support
- Let them know who else you are naming, so no one is surprised
They may have questions for you, too. How much time might this take? Will I be paid? Who can I call for help? It is fine not to have every answer. Your attorney can help with the details.
Key terms
- Personal Representative: Sometimes called an executor. Settles your estate after your death.
- Trustee: Manages property held in a trust and makes payments to beneficiaries under the trust’s terms.
- Agent under a power of attorney: Acts for you during your life if you cannot manage your finances, or, in a health care document, your medical decisions.
- Guardian: Appointed by a court to care for a minor child or an adult who cannot make personal decisions.
- Conservator: Appointed by a court to manage money and property for a minor or an adult who cannot.
Want to read more?
These articles are optional.
- Fiduciary duties: What these roles require by law. See this article.
- Guardians: Choosing someone to raise your minor children. See this article.
- Health care agents: Choosing the person who makes medical decisions for you. See this article.
- Glossary: Common estate planning terms. See this article.
- Financial power of attorney: What your Financial Agent can do and how to choose one. See this article.