Clients or their family’s will often inquire how a fiduciary spends his or her day taking care of the financial needs of the client. Some may be under the mistaken impression that the fiduciary’s role may be limited to functions such as paying the client’s bills. In fact, the fiduciary’s responsibilities are extensive and varied. Following, by way of example, is a list of some of the functions the fiduciary commonly performs:
- Reads and reviews the client’s estate plan (trust, wills, powers of attorney, etc) to ensure that the fiduciary is acting in accordance with the client’s wishes. For example, the fiduciary needs to understand the standard by which they are to make distributions to the client’s children or friends.
- Confers with the client’s attorney to confirm the fiduciary’s understanding of the estate plan
- Builds and maintains working relationships with the client’s family members and others, to help establish expectations and avoid unnecessary conflicts that can lead to fractured relationships, inefficient and costly administration, and/or litigation.
- Identifies and gathers all of the various assets belonging to the client that are required to be brought under the fiduciary’s authority and responsibility. Communicating with and/or visiting each financial institution can be quite time consuming.
- Inquires and accrues various government benefits on behalf of client or his or her estate
- Pursues assets that are deemed “lost” that have escheated to the State of California.
- Procures and maintains new or expanded insurance coverage: health, life, disability, home, auto, umbrella, earthquake, long term care, etc.
- Establishes and re-evaluates yearly budgets with beneficiaries to ensure distributions are in conformity with estate plan and appropriate in size and scope.
- Pays all of the client’s recurring bills.
- Collects and reviews all of the client’s regular mail.
- Manages client’s real property, either directly or through a property manager. Management includes insurance selection and coverage adequacy, property tax payments, evaluating for improvements and repairs, hiring broker (if property to be sold) and reviewing broker contracts, purchase offers and closing escrow; tenant relations and rent collection.
- Manages client’s investment advisors by scheduling regular investment review meetings. Note that the advisor is an agent of the fiduciary, hence the fiduciary remains at risk for negligently hiring or retaining the advisor.
- Mediates conflicts among beneficiaries, between the client and beneficiaries, or among any parties who have an interest in the estate plan.
- Tracks the client’s income and expenses throughout the year so that an annual fiduciary accounting will be rendered for the benefit of the client and/or his or her family or others.
- Tracks income and expenses during the year to organize the client’s income statement for the preparation of income tax returns.
- Assists the client to locate a residence that is appropriate to the client’s needs
- Hires and manages Care Managers, who in turn will supervise and monitor caregivers
- Confers with client’s doctors and residence staff about client needs, treatments.
- Identifies and responds to client’s evolving needs to ensure that client remains safe, and physically and emotionally healthy. This will include, by example, ordering supplies and devices for client, identifying and hiring therapists, companion care, organizing outings, etc.
- Ensures arrangements are made for the client’s funeral, disposition of remains, disposition of client’s personal belongings.