Sometimes it seems like you need to learn a whole new vocabulary in order to understand your estate plan. One term you hear frequently in the context of estate planning is “fiduciary.” Do you know exactly what it means?
A fiduciary is a person or an entity (like a business or an association) that manages assets or holds power on behalf of and for the benefit of another person. A fiduciary has the legal authority to act on behalf of another person, and with that authority comes a duty to act with loyalty and in good faith in representing that person’s interests.
When it comes to making an estate plan, you’ll need to appoint several different fiduciaries, including:
- Executor/Personal Representative: This person is responsible for administering your estate in accordance with the terms of your Will and in compliance with state law. Florida law has specific provisions limiting who can serve as your Personal Representative/Executor.
- Trustee: If your estate plan includes a Living Trust, you’ll serve as initial Trustee. However, you’ll appoint a Successor Trustee to manage the trust in the event of your disability and to administer it upon your death. Your Trustee must follow your instructions in managing the assets of your Trust.
- Guardian of Minor Children: If you’re the parent of young children, you’ll appoint a Guardian to care for them in the event that your children are orphaned before they reach adulthood.
- Attorney In Fact: You’ll use a Durable Financial Power of Attorney to name an Attorney in Fact, or agent, to manage your finances in the event of your disability.
- Health Care Agent: You’ll use a Durable Power of Attorney for Healthcare to name a Health Care Agent to make medical decisions on your behalf in case of your disability.