How a Fiduciary Can Help Protect You and Your Assets
Old age and retirement opens the door to a whole new chapter of challenges in life.
Not having proper healthcare and a sound financial plan are typically the most common challenges that retirees face. Additionally, there are many people who do not have a support system, people who have lost touch with their family, and others who simply are not comfortable sharing their financial and asset-related information with their loved ones. Financial planning, particularly post-retirement, is crucial for people seeking licensed professionals who offer support and retirement planning services to help them feel secure in their next chapter of life.
What is a Fiduciary?
A fiduciary, commonly referred to as a professional fiduciary, is a person or a legal entity that has the power and responsibility to make certain decisions on behalf of their clients. These decisions require great trust, faith, and honesty. A licensed fiduciary monitors their client’s investments, financial situation, and well-being for the whole duration of their relationship. Many of the nation’s best financial advisors for retirements, such as money managers, financial advisors, and accountants, become professional fiduciaries to add an additional level of credibility and extend their service offerings to their clients.
Fiduciaries are licensed by the state they operate in and are required to follow a code of conduct and ethics. They work within the limits of legal authority granted to them for the best interest of the person they represent. In addition, fiduciaries can be bonded, unlike family members.
Why are Fiduciaries Important?
Elderly people are susceptible to asset and financial abuse from family members and/or caretakers. Fiduciaries specialize in ‘undue influence’ to help protect their client from financial manipulation for personal benefit.
Professional fiduciaries can legally make changes to their client’s accounts, filter transactions, and itemize medical bills to ensure their clients are in good hands. They also offer wealth management services to minimize the exploitation of their client’s money.
Fiduciaries also offer financial planning services to disabled and challenged elders. Many fiduciaries have a solid understanding of the law and have trustworthy relationships with professionals like attorneys, appraisers, and real estate agents. They also supervise caregivers, medical treatments, household maintenance, and finances to make sure that the client and their assets are secure.
Why Should I Hire a Fiduciary?
There are several situations when a fiduciary can be hired. Below are a few common examples:
- When doing advanced estate planning, a person with full mental capacity can hire a private fiduciary to look over health care and finances in case of future incapacity.
- A fiduciary can create an advance directive and assign a successor or trustee if their client passes away.
- A fiduciary can oversee finances and healthcare of elders with impaired mental capacity (e.g. a patient with Alzheimer’s) who did not do estate planning in advance.
- Family members may agree upon a professional fiduciary appointed by the court as a conservator for overseeing the elder person’s assets in case of his incapacity.
- When an elder named his family members as co-trustees in the event of disability, but they disagree over matters of financial and medical care, a professional fiduciary can take an oversight role. The court can also appoint a fiduciary if the situation demands.
- Elders with a distributed family and high potential heirs can hire a fiduciary to ensure that their assets are distributed according to their will in their absence. A neutral person makes this process indiscriminate and family harmony is maintained.
How Do I Find a Professional Fiduciary?
Attorneys specializing in trust and interest probation, wealth management advisors, caregiving agencies, doctors, and the National Association of Certified Financial Fiduciaries are some of the places to look for a faithful and law-abiding fiduciary. The fiduciary must hold a legitimate license, work as a professional or for a professional organization, have a strong moral compass, and adhere to the client’s requirements.
Children with irresponsible and abusive parents, elders with clinical conditions, and people with strained family relations benefit largely from professional fiduciary services. A person in good health should also opt for licensed fiduciaries to avoid family conflicts and drama over wealth and assets. In the later years of life, people need care, attention, and assistance. Fiduciaries are not just ‘check books’, they are the right people to take care of the client and their assets, thus relieving them of unnecessary strain.