A fiduciary is entrusted to manage the financial and/or healthcare affairs for another. Financial affairs often include management of bank accounts, investment portfolios, retirement accounts, real estate, rental properties, timber or ranch land, business interests, public benefits, and tax matters. Health care affairs can include advocating for a client who is living with a degree of cognitive and/or physical impairment. Sometimes clients are in the extremely vulnerable and dependent process of dying. The fiduciary’s duty to his or her client requires the utmost of loyalty. Professional fiduciaries are specifically trained in the art and science of guiding clients, and ultimately making decisions on behalf of clients, without any personal bias, and do so while steadfastly protecting and honoring the client’s wishes. Many people select a friend or family member to act as their fiduciary. While this may work in some cases, there are many reasons to choose a professional fiduciary:
- Professional fiduciaries are licensed and regulated by the Professional Fiduciaries Bureau, within the California Department of Consumer Affairs. They are trained in, and must adhere to, federal and state laws, professional and ethical standards, and prudent policies and standards, in order to safeguard the financial and health care interests of their clients. Professional fiduciaries are required to report annually to the Bureau.
- Professional fiduciaries must complete 15 hours of continuing professional education annually in order to maintain their license, including 2 hours of ethics.
- Professional fiduciaries maintain errors and omissions liability insurance.
- Professional fiduciaries have the knowledge and community resources to source and work cooperatively with accountants, attorneys, investment advisors, insurance and real estate agents, health care providers, and other professionals for assistance with a wide spectrum of legal, financial and health care matters in order to manage and enhance the best interests of their clients.
- Professional fiduciaries are never to make a decision regarding a client’s finances or healthcare from a place of self-interest or greed. Professional fiduciaries understand that their priority is to honor and protect their clients’ wishes and best interest. Although we like to think that the same is true of our family members and friends, the lack of regulations and training for non-professional fiduciaries can result in tragic financial, personal, and family dramas.
- Professional fiduciaries, as professional service providers, do charge for their services. This may serve as an initial deterrent to a consumer who assumes family or friends can perform the same work for less money. However, if there is contention among family members or beneficiaries, or if the assets held in the trust or estate are somewhat complex, the fees of a professional fiduciary may pale in comparison to the cost of litigation, or mediation and legal fees, when a non-professional steps into a situation that he/she is ill prepared to navigate.