Professional Fiduciaries are entrusted to provide financial and healthcare options that ensure their clients’ dignity and peace of mind. They provide the experience, resources, and knowledge to oversee services. For example, paying bills, legal, investment management, medical care, housing, and nutrition, among other things.
Licensed and Regulated
Professional Fiduciaries are licensed and regulated by the State of California and must follow a strict code of ethics. The first thing to remember, one must take courses required by the licensing bureau. They must pass a lengthy exam, attend continuing education, have a clean background check, and be bondable. Additionally, they are strictly bound by the California Probate Code. And ultimately answer to the court even if the matter is not court-supervised.
Who do Professional Fiduciaries Serve?
They serve seniors, people with mental and physical disabilities, and children who do not have a family member with the skills or proximity to manage and protect their money and healthcare needs before and or after they die. And who do not have the knowledge or ability to manage these affairs themselves. Additionally, they manage Special Needs Trusts for developmentally and mentally disabled individuals and are also guardians of children.
A Professional Fiduciary can be an independent third party for people with potentially tricky family dynamics. This ensures keeping their clients safe and protects their assets.
Why would you use a Professional Fiduciary?
There are several different types of Professional Fiduciary relationships. Each comes with unique duties and responsibilities for the person who requires representation. Usually known as the principal, ward, or beneficiary.
There are many benefits to hiring a Professional Fiduciary. A Professional Fiduciary has the knowledge and resources to help manage an estate, financial affairs, and a special needs trust.
Professional Fiduciaries provide peace of mind that matters are handled professionally and ethically. Hiring a Professional Fiduciary can also help minimize family drama and preserve relationships among siblings and relatives.
When should you use a Professional Fiduciary?
There are several everyday situations when someone may hire a Professional Fiduciary. When doing advanced estate planning, a person with total mental capacity may name a private fiduciary to oversee health care or manage finances in the event of future incapacity. This process may include naming the fiduciary as POA for finance. A power of attorney for an Advanced Healthcare Directive and being named in trusts as the successor trustee who steps in after the person passes away.
A Professional Fiduciary can oversee the health care and, or finances of someone with impaired mental capacity, such as an elder with Alzheimer’s who did not do advanced estate planning. Family members may agree on a Licensed Professional Fiduciary to act as a court-appointed conservator over their elder’s person and estate. A Professional Fiduciary can be bonded where most family members cannot.
Oversight Role
In the case where the elder named children as co-trustees in the event of incapacity, and the children disagree over the care and financial matters, they may choose to hire a Professional Fiduciary. The Professional Fiduciary takes over in an oversight role, or a court may intervene and appoint a Professional Fiduciary. In blended families with children from different marriages, an elder may choose to name a Licensed Professional Fiduciary. This ensures their wishes are fulfilled after they are gone. This provides peace of mind, knowing having a neutral person step in will aid with family harmony.
A Professional Fiduciary may be needed in situations of what is called “undue influence.” This is where someone with significant financial resources needs the impartiality of a Professional Fiduciary. The Fiduciary makes decisions on their behalf because of evidence that family members (or an appointed agent) may misuse or take advantage of access to the person’s finances.
How does the process work?
The State of California licenses a Professional Fiduciary and follows a code of ethics. Licensed Fiduciaries are required to act within the legal authority granted to them. And, most importantly, work in the best interest of the person they represent.
Licensed Professional Fiduciaries are either appointed by the court or hired privately. They are often referred by an attorney who has drafted a trust agreement on behalf of an individual. And then refer their client to a Professional Fiduciary to administer a trust or be put forward to the court for appointment.
Professional Fiduciaries can also serve as court-appointed probate administrators when no prior estate planning has been done. Or when the decedent’s family members are out of the state or country, as will other court-appointed positions. Licensed Professional Fiduciaries can be bonded as the court requires when family members cannot.
Power of Attorney documents
An elderly or disabled person wanting to appoint a neutral individual to manage their healthcare and finances can name a Professional Fiduciary in their Power of Attorney documents. In instances where a senior has not named an agent to act on their behalf before becoming incapacitated, or in cases where an already appointed agent is misusing or abusing their position, guardianship (also known as conservatorship) proceedings can be brought to protect and assist the elder or disabled person.