Selecting the proper fiduciaries in estate planning is an important aspect of the planning process. When an individual creates a Last Will or Trust, the Executor or Trustee is the person who is given the responsibility to carry out the creator’s plan and protect the creator’s assets.
The fiduciary has many different responsibilities which include safeguarding and investing assets and paying income and principal to named beneficiaries. A person who is nominated and acts as an executor or trustee owes fiduciary duties to the beneficiaries. Sometimes the interests of the beneficiaries may be in conflict. For instance, an income beneficiary of a trust will want the trustee to invest in high income producing assets while a beneficiary who has an interest in the principal or trust remainder may want investments that produce lower income but higher long-term growth. The trustee must balance the interests of the beneficiaries and often is guided by the terms of the Will or Trust agreement regarding the manner in which he proceeds. Continue reading →