5 minute read

How to Choose a Professional Fiduciary for My Estate

Hiring a Professional Fiduciary is one of the best ways to ensure your estate is executed according to your wishes. Here are some tips for choosing one.

Patrick Hicks

Patrick Hicks, @PatrickHicks

Head of Legal, Trust & Will

Managing an Estate is a complex responsibility. The process requires the navigation of sensitive topics, often involving personal information and financial details. Because of this, it is crucial to select someone you trust to help manage your estate. A Professional Fiduciary may be the best fit for this role. 

Professional Fiduciaries are trained to help manage financial affairs, legal matters, and more on behalf of other individuals. There are numerous reasons why you might choose to work with a professional for your Estate. Keep reading to learn more about what a Professional Fiduciary is and how to find the right one for you.  

What Is a Professional Fiduciary?

A Professional Fiduciary is a person whose job is to make decisions on behalf of another individual, often in a legal or financial capacity. Professional Fiduciary roles are common in Estate planning and can include an Executor, Trustee, Conservator, or an Agent acting under a Power of Attorney

You can be appointed to a fiduciary role by a family member, however, if you act in this role for multiple people you may be required to get a license. The licensing requirements for Professional Fiduciaries vary based on the state but generally include education courses and an application. 

There are many career paths that lend themselves to the role of a Professional Fiduciary. These include Certified Personal Accountants (CPAs), Attorneys, Financial Advisors, and other related roles. In many cases, these professionals do not need additional licensing to be considered a Professional Fiduciary.

What Does a Professional Fiduciary Do?

A Professional Fiduciary manages responsibilities on behalf of a client, whether those are legal, financial, or medical. The expectation of a Professional Fiduciary is that they will provide the utmost level of care possible throughout their services. 

The exact duties of a Professional Fiduciary depend on the capacity of the role, for example, whether the person is an Executor of Estate or Power of Attorney. Generally speaking, however, the various roles of Professional Fiduciaries include: 

  • Follow the code of ethics laid out by the profession

  • Financial management, from managing a Trust to paying recurring bills

  • Consult on various decisions and explain possible outcomes

  • Make medical decisions with clients’ wishes in mind

  • Coordinate long-term care 

  • Communicate with family members and loved ones when needed

  • Serve as a guardian 

  • Provide support throughout changing circumstances

  • Respect the privacy of clients and act according to appropriate standards

  • Report to the court as necessary 

What Are Typical Professional Fiduciary Fees?

Typical Professional Fiduciary fees are between 1 and 1.5 percent of Trust assets annually. According to The Law Offices of Daniel A. Hunt, some Professional Fiduciaries charge on an hourly, monthly, or annual rate instead of a percentage of returns. 

Overall, there is not an exact fee structure to expect. The cost of Professional Fiduciary services will depend on the exact role and responsibilities. Always consult with a Fiduciary before working together to ensure you are aware of the service cost. 

Why Use a Professional Fiduciary?

Many individuals choose to use a Professional Fiduciary for the level of trust and expertise they can provide, especially when Estate Planning. A Professional Fiduciary has certifications and experience, which can be crucial when dealing with complex financial matters. 

Working with a Professional Fiduciary can also help you maximize savings opportunities and improve your long-term financial management. If you have a Trust that requires a higher degree of oversight, such as a Special Needs Trust or a Spendthrift Trust, you may feel more comfortable with a qualified professional at the helm. 

There are other situations where you may feel more inclined to use a Professional Fiduciary, for example, if you are single and do not have children. However, many families still prefer this method to avoid future disagreements among beneficiaries. All in all, choosing a Professional Fiduciary can provide clients with a stronger sense of peace of mind.

How to Choose a Professional Fiduciary

When selecting a family member to act as a fiduciary, many individuals base the decision on geographic location, gender, or occupation. However, these factors will not necessarily help when it comes to choosing a Professional Fiduciary. 

Instead, you should consider a range of factors based on your personal financial and legal needs. It can take a bit of research to find the right Professional Fiduciary, however, our step-by-step guide is here to help. Review the following criteria as you choose a Professional Fiduciary:

1. Determine what’s most important to you in a Professional Fiduciary

The first thing you should do, even before identifying potential candidates, is to ask yourself what you want in a Professional Fiduciary. Why are you hoping to hire a professional? What experience do you expect them to have? Do you want to work with more than one fiduciary, or would you prefer one advisor for all of your needs? 

These questions can help you uncover your needs and set expectations for the search ahead. By doing this now, you will be able to vet candidates with a clear end goal in mind. Remember, focus on what is important to you and your situation. 

2. Ask friends and family for referrals

As with all service providers, the best place to start is by asking your friends and family for recommendations. Use your personal connections to ask for referrals and keep contact information in a list. This will help you avoid repeats as you do your own research. 

If you have already started on your Estate Plan, be sure to ask your Estate Planning attorney for Professional Fiduciary recommendations as well.  Because they know your specific financial and legal needs, they will likely be able to point you in the right direction. 

3. Search online for providers

After asking around for referrals, take time to do your own research as well. It is typically recommended to utilize a number of online resources, from Google to Yelp to BBB, so you can learn more about potential fiduciaries in your area. These websites will allow you to review previous clients’ experiences.

Additionally, there are specific organizations that have online fiduciary search platforms. For example, the Professional Fiduciaries Bureau of California offers a number of online resources to help residents find the right professional.  Other organizations, such as the National Association of Personal Financial Advisors, have a number of nationwide search tools.

4. Call references and run a background check 

With your list of potential options handy, take time to review each advisors’ background and experience. Think of this step as a job interview process, where you are confirming applicants’ qualifications before moving forward. After all, you are considering hiring this person for financial and legal purposes. 

Many states have online platforms available that allow consumers to validate certificates and licenses. Utilize these websites to confirm the qualifications of any Professional Fiduciaries you are considering. 

At this time, you may want to reach out to various offices to request references from your potential candidates.  References could include past clients, family members of previous clients, attorneys, or other professionals they have worked with.

5. Interview your potential Professional Fiduciary candidates

Before selecting a Professional Fiduciary, we recommend setting up a time to interview the candidates on your shortlist. Again, think of this process like a job interview. You are taking the time to consider each candidate to ensure you have complete trust before hiring them. 

The interview or consultation should focus on qualifications and previous experience. Ask questions about their areas of expertise, availability, and overall costs of service. It is also a good idea to ask about organizational concerns, such as privacy and security standards. This can help you make sure your data and personal information are safe with whoever you decide to work with. 

From there, provide some information about your Estate and long-term planning needs. This will give you a chance to hear their initial impressions. Take time to ask if they have worked with clients in similar situations and what their approach was. The purpose of this step is to ensure you will be a good fit when working together. 

Get Your Estate Plan in Order Today

The decision to hire a Professional Fiduciary can help you finalize your Estate Plan, and ease your worries about financial management. While it is relatively common to nominate a family member or other loved one to serve in this capacity, they cannot guarantee the same level of experience as a professional. For this reason, even individuals with close-knit families still opt for a Professional Fiduciary. 

The process of Estate Planning and hiring a Professional Fiduciary may sound complex, but it does not have to be. For starters, our team can help you create an Estate Plan from the comfort of your own home. As you map out your various financial needs, our legal professionals can help you decide if a Professional Fiduciary is the right move for you. 

A Professional Fiduciary can take on many responsibilities, from regular bill paying to long-term Trust management. These qualified professionals can help you manage complex financial and legal situations by providing the highest standard of care. Depending on your Estate Plan, a Professional Fiduciary may be the right fit for your long-term financial needs.

Is there a question here we didn’t answer? Reach out to us today or chat with a live member support representative!