Broker Check


Consider Family When Selecting Your Estate Fiduciary

| November 27, 2017

Bob was the oldest son of Ken and Sue Holmes. Responsible, hardworking and a successful business owner himself, Bob seemed to be the natural choice for serving as successor Trustee and Executor for Ken and Sue’s estate. Unfortunately, what Bob came to discover, serving as his parent’s estate fiduciary presented a number of hidden challenges which cost him a significant amount of time, money, and ultimately, the irreplaceable relationship of his only sibling and her family.

As his parents aged and began to struggle with dementia, Bob became responsible for the oversight of his parent’s financial affairs and ever-changing care needs. With the passing of Ken, and then Sue, additional responsibilities as representative of his parent’s respective estates was added to his already busy life. As Bob experienced, addressing this additional responsibility in the midst of losing his beloved parents added a significant element of emotion to these new and unfamiliar tasks.

Although Bob’s intentions were good, the additional time, stress and dealing with the admittedly confusing terms of estate documents filled with “legalese” was quite overwhelming. Bob did the best he could, when he could.

In the meantime, Bob’s sister was quite anxious to receive her inheritance.

Bob’s lack of timely reporting came to be viewed suspiciously. In the context of their respective grieving, tensions grew as time passed. Communication began to deteriorate and was completely cut off once Bob’s sister retained an attorney to be her voice.

After much time and expense, the estate was closed. Bob and his sister received their share of the parent’s estate. Unfortunately, Bob and his sister, and their families, no longer speak. What had been a close knit family was inadvertently destroyed. 

Why is it that this all too common story is repeated in so many families? How can such adverse consequences be avoided? 

First, as highlighted by this unfortunately true story, selecting the proper estate fiduciary is extremely important. If considering a family member or trusted family friend, time availability and an understanding of the various legal, tax and financial issues which will arise are important considerations. Equally, if not more important, is considering what impact will putting the family member or trusted family friend in the midst of the family wealth have on their relationship other members of the family.

Secondly, anyone who serves as estate fiduciary should seek professional guidance and support. The family’s financial advisor, CPA and estate attorney can prove invaluable in navigating the unknown. However, because these professional advisors often do not have the experience of actually serving in the role of Trustee or estate Executor, more specialized administrative and consultative support may be beneficial. The good news is that there are a handful of firms that specialize specifically in this area. A google search of “Trustee Services” will reveal some resources in this regard.

If someone other than a family member or trusted friend is desired, a professional trustee or corporate trustee are common alternatives.

Your financial advisor can often be very helpful in helping you find a third-party trustee or estate fiduciary that will best serve your unique family needs. In addition to their wealth management capabilities and expertise, your financial advisor has also likely gained an intimate understanding of you and your family . . . your desires . . . your values . . . your goals . . . your fears and challenges. All make up your story . . . a story worthy of being understood . . . especially in the context of the oversight of your family’s wealth. 

Because of the importance of understanding your story, your family, and the intended purpose of your wealth, most families find it essential that the third-party trustee work collaboratively with your existing professional advisory team. This “open architecture” approach enables you to enjoy a more personalized, beneficiary focused Trustee / estate fiduciary solution which prospers from the “group think” of the experienced professionals of your choosing, all of whom are working together and focused upon addressing the multifaceted tax, legal, financial and relationship complexities associated with transferring wealth to family.

Furthermore, by continuing to involve your financial advisor and existing professional advisory team can help guard against the frustrating “wealth takeover” feeling and conflict of interest issues which can sometimes be presented when the third-party trustee is also in the wealth management business.

In summary, it’s your wealth. It’s your family. You have a lot at stake. In order to ensure a successful transition of your wealth to those you love, it is important to consider the various responsibilities and relational challenges which may be presented when serving as Trustee or Executor of your estate.


About the author:

Steve Marken is President of Stewardship Counsel, a 501(c)(3) non-profit organization collaboratively supporting and working through a national network of skilled professionals focused upon assisting families, foundations and the professional advisory community in proactively addressing the character and relational challenges often encountered with meaningful wealth, while simultaneously helping establish inspired and responsible stewards of the family legacy. Steve also serves families and professional advisors throughout the Country in the role of private professional trustee.