This question comes up a lot because sometimes our clients don’t have children or family of their own, or they do but those children are not mature enough to handle financial affairs yet. It also comes up when clients do have mature children but they don’t want them to be burdened with the financial management of their affairs should they be incapacitated or pass away. This is often the case when our client is a business owner.
Here are 3 things we share with our clients who don’t have an Executor/Trustee:
Lawvex or a Lawvex Attorney should generally not be named in our estate plans as an Agent/Trustee/Executor.
I have had people ask me to be their nominated Executor of their Will, successor Trustee of their Trust, or Agent under Power of Attorney or for me or the firm to have the authority to select an individual when needed to fill these roles on death or incapacity. It is technically possible for an attorney to write themselves in as an agent/successor trustee/executor in a plan that they draft. I don’t know if it’s technically possible to name the law firm corporately to make the choice in the future, but as a matter of policy we don’t want Lawvex corporately named in anyone’s plan whether as a successor Trustee, or Executor, and as a general rule none of our attorneys should write themselves in as an Agent/Trustee/Executor either because our role is to represent and advise the Executors, Trustee, or Agent, not to actually be that person and do that job.
Lawvex Attorneys Can Serve as “Trust Protectors”.
A Trust Protector is a different option that is a helpful tool in drafting as a check and balance against a poorly performing trustee, a change in the law, and a few other things. The concept is that your Lawvex attorney could remove and replace your Trustee with a different one if they are not doing their job. Mostly I only see Trust Protectors in irrevocable trusts that have ongoing administration such as Supplemental Needs Trusts, I rarely see them in revocable living trusts that terminate on the death of the grantors and then only survive as an irrevocable trust for administrative / distribution purposes for a short time. But, I don’t know of any authority that prevents a Trust Protector from being named to watch over trust admin in ordinary living trust administration once the trust is irrevocable. As long as we clearly define in the document that the Trust Protector is not serving in a fiduciary capacity, then the Trust Protector is not held to the same fiduciary standard of care as a trustee.
A trust protector may be provided with a variety of powers:
- The trustee can be required to keep the trust protector informed about the trustee’s actions;
- The trust protector can demand an accounting and the right to review all accountings;
- The trustee can be required to consult with the trust protector;
- Under certain circumstances, the trust protector may have the power to direct the trustee, in which case the trust protector would have the power to initiate an action against the trustee;
- The trust protector could have the power to amend the trust to carry out the trust purpose should rules and regulations change;
- The trust protector could be authorized to remove and appoint members of the trust advisory committee; or
- Any combination of the above.
It is entirely appropriate for Lawvex attorneys (if they choose to) to name themselves individually in a client’s trust as a Trust Protector of an Irrevocable Trust and specify what the Trust Protector is authorized to do, such as remove and replace a trustee.
Name a Licensed, Bonded, Professional Fiduciary.
Another option is to designate a professional fiduciary to serve as your Executor, Trustee and Agent. Professional fiduciaries are licensed by the State of California, bonded (insured) against fraud and theft, and generally have experience in managing investments and assets.
Professional fiduciaries can be a great option to turn to when you don’t have any family or friends that you trust, or you just don’t want to burden them with your financial affairs. Professional fiduciary fees range but generally are between $100 – $150 per hour in most cases, or they charge some percentage of the assets they are managing like 1%, 2%. The fees will be more if there are complications with the assets, like running your business, or if there are high maintenance beneficiaries.
You can learn more about professional fiduciaries here: https://www.fiduciary.ca.gov/ and search for a professional fiduciary in California here: https://search.dca.ca.gov/
At Lawvex, we are dedicated to your Education and we want your estate plan to provide drama-free inheritance to your family. If you don’t have a family member or friend you are excited about designating to handle your affairs, maybe it would be workable if you knew that a Lawvex attorney was your Trust Protector and would watch over them. Or, you could just name a licensed, professional fiduciary to take care of your affairs. Either way, I hope this blog provides you with some options if you don’t have family or friends to act as your Exectuor, Trustee or Agent. If you have questions about this for your estate plan, call us at 888.308.7003 and we can help you get your estate plan updated today.