Trust Management – A Q&A with A Fiduciary

What is a fiduciaryFiduciary.  Most commonly, this is thought of as a type of duty or responsibility, but it’s also a job title.  I wasn’t very familiar with what a Fiduciary was, so I recently sat down with Darren Wallace of Wallace Fiduciary to get a better understanding of what his role is.  Here’s our Q&A.

What is a Fiduciary?

A Fiduciary is someone who manages an asset or piece of property for the benefit of someone else.  In most cases, you can think of a Fiduciary as a neutral-party Trustee.

Why did you want to become a Fiduciary?

I wanted to do something more meaningful. I like helping seniors and being the voice for those who don’t have a voice.  By being a Fiduciary, it gives me the opportunity to defend people from elder abuse. I’ve seen one client who had his house stolen and another who was victimized for $750k.  To be able to help people like that, or better yet, help prevent that, is really fulfilling.

Why should someone use a Fiduciary?

There are a lot of reasons to use a licensed Fiduciary.  First off, most attorneys will charge a lot of money to manage a trust, and many of them don’t even do this work any more.  As a Fiduciary, I can manage trusts for clients while they’re still alive, including managing caregivers, investments and paying bills.  I can manage everything in the name of the trust – LLC’s, property, business interests and more.

Couldn’t a CPA just act in this role?

They could, but CPA’s are more expensive and less experienced at being trustees.  It’s more of a side part of their business and not their core area of expertise. With a Fiduciary, this is what we do, and we’re highly trained and experienced.

Is being a Fiduciary less limited than being a Trustee?

Think of it this way, a trust is like a box and the Trustee can only act on those things within the box.  A Fiduciary will usually have power of attorney and can act on things that are outside of the trust. This usually includes power of attorney for financial and medical issues as well.

When is the right time to hire a Fiduciary?

The sooner the better, really.  Once you have a trust, you should set up the partnership with a Fiduciary.  75% of the time in family trusts, a family member or friend will be the Trustee, and this can work well.  In other cases, a third party is needed to ensure that people get along. A Fiduciary can handle the minutiae while others can grieve.  We can take some of the drama out of the management of the trust and be a professional middle-man in contentious situations.

Are there signs that signal you really need a Fiduciary?

The biggest sign is when the current Trustee has done nothing for an extended period of time.  Then it’s time to bring in a Fiduciary to provide management and move things forward.

What should someone look for in a Fiduciary?

My advice would be to:

  • Find someone who will be there when you need them.
  • Identify someone who is comfortable and experienced with the type of situation you have – for example, feuding kids/beneficiaries.  I really like some of the crazy cases, but not everyone does.
  • Be sure to ask about rates, billing, employees, how they manage client files, how they secure client files, who has access to files, errors & omissions insurance, and references.

Having worked with my sister to manage our parents’ trust, I can really see the benefit of a Fiduciary – and we get along really well!  But needing to deal with all of the business parts of the loss was sometimes overwhelming and it definitely would have helped us to have someone to herd all the cats.

To learn more about the role of a Fiduciary, give Darren a call – 650.208.5509.

Darren Wallace is the Principal at Wallace Fiduciary Solutions.

 

IMPORTANT NOTE: I have not and will not verify or investigate the information supplied by third parties.

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