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Note: Nothing in this publication is intended or written to be used, and cannot be used by any person for the purpose of avoiding tax penalties regarding any transactions or matters addressed herein. You should always seek advice from independent tax advisors regarding the same. [See IRS Circular 230.]

Content: Copyright © 2006 Integrity Marketing Solutions

Critical Choices

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Fiduciary Fulfillment

     Simply put, a fiduciary is a person or an institution legally responsible for the financial affairs of another. They are held to the highest standards of care and loyalty in this role. Who will manage any inheritance left upon your death?
     Practically speaking, you have three options. [By default, the selection will be left to a court that does not know you or your family.]
     Option #1: Appoint trusted family members or friends. Upside: They likely know the strengths and weaknesses of your heirs, plus they may not charge much, if anything, to oversee the inheritance. Downside: They may be busy with and distracted by their own financial responsibilities and/or not be able to say "no" to irresponsible heirs.
     Option #2: Appoint a professional fiduciary, such as an institution (e.g., a corporate personal representative/trustee). The upside and downside are the reverse of Option #1.
     Option #3: Combine Options #1 and #2 for the best of both worlds. In other words, the family appointee who knows the strengths and weaknesses of your heirs will not jeopardize their relationships with your children, nor will they get bogged down with investments, accounting and tax details. Instead, the professional fiduciary shoulders (and is compensated for) the day-to-day management of the inheritance for your heirs. Plus, they can play the "heavy," if needed.

Summary

     Few decisions in life are more important than appointing appropriate guardians and fiduciaries. Accordingly, always seek competent legal counsel for these and other legal decisions affecting your family matters.