When Does It Make Sense to Hire a Professional Fiduciary?

When Does It Make Sense to Hire a Professional Fiduciary?

Silicon Valley has long served as a beacon throughout the country and world for the best and brightest technology professionals seeking career and economic opportunities. Within the counties of Santa Clara and San Mateo, 38% of the residents were born outside of the United States as of 2017,1 and countless more are domestic transplants from all corners of the United States. Many of those seeking, and obtaining, the financial rewards promised by Silicon Valley came from families of middle-class or more modest means and are often the first generation to become millionaires. As a result of these unique regional dynamics, a dilemma is created as those with accumulated wealth begin to age while being geographically separated from family who, in their own right, may not have experience managing complex financial affairs.

It is common during the aging process to arrive at the sobering realization that you need to assemble a capable team to shepherd you through the transition process should you become ill, frail or incapacitated. Hiring a wealth advisor to manage investments, creating an estate plan, funding the education needs of children and insuring homes and valuables are natural first steps. And while you feel confident that there are sufficient funds to cover your long-term care needs, have you thought about who will manage this process and protect your financial, mental and physical well-being as you look toward your golden years?

If you are not among the lucky few who have both nearby and financially savvy loved ones, you may be in search of an alternative resource to take control should you become incapacitated or pass away. And even if you do have possible assistance from family, you may be concerned about the disruption on the lives of your children or siblings. Selecting one sibling or child over another, or providing additional access to a sole family member, can also produce unintentional and undesirable rifts. Fortunately, the option to utilize a professional fiduciary presents a sound and viable solution to the vexing problem of whom to rely upon as you age.

A professional fiduciary, either an individual or firm, is an appointed party to manage and protect your personal affairs, property and assets to help ensure your mental and physical well-being. The professional fiduciary’s role includes medical care oversight during life, guidance and coordination in transitioning from home to assisted living, property management, estate administration at death – just to name a few. Importantly, this individual is not an actual caregiver, but he or she will arrange for these services to be provided.

To begin the process, you should interview a few different firms and obtain references prior to making your final selection. Be sure that the potential independent fiduciary is licensed in the state in which you live. Most states maintain a directory of licensed fiduciaries. These individuals are heavily regulated and held to a certain fiduciary standard who must act in the best interest of the person they are representing. Start building the relationship before the fiduciary actually needs to step in. You want time to thoughtfully articulate your expectations and establish that much-needed level of trust and confidence to ensure your plan will be carried out as you intended. In working with your estate planning attorney, this individual will be appointed as a fiduciary in your estate planning documents.

You have worked hard to attain security and peace of mind for you and your family, perhaps having traveled a great distance to Silicon Valley or risen from modest means. In addition to leaving a financial legacy, your greatest gift to your family will be the implementation of a well-considered plan so as not to be a burden to them. Work with your wealth advisor for recommendations as to who would be suitable candidates to fill this critical role to complete your team.

 

“Percentage of the Total Population Who Are Foreign Born.” Silicon Valley Indicator, Joint Venture Silicon Valley, www.siliconvalleyindicators.org/data/people/talent-flows-diversity/foreign-born/percentage-of-the-total-population-who-are-foreign-born.

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