Professional Fiduciaries in Trusts and Probates

I have had a law practice focused on trusts, estates and probate since 1994.  I have been involved with some thousands of wills, trusts, and probates during that time.  I am not yet aware of a professional, third party, fiduciary stealing, making errors or generally causing trouble in the administration of a trust or estate.  The same can not be said for using family as executors and trustees.

The combination of death and money can create monsters! It must be human nature because I have seen it happen to “the best guy” and to people “that get along great.” I have seen good people and bad people steal, make major errors and more generally cause trouble.

As an estate planning attorney my job is to help plan so your family dos not have problems after your death.  The longer I do estate planning the more I frequently do I recommend professional fiduciaries.   They do not bring the personal and emotional issues to the table. For them it’s a JOB!  They take it seriously and do it well!

When looking beyond family and friends for an executor or trustee I normally consider the following options:

Bank or trust department – Pretty much all national banks and stock brokerage companies have trust departments.

Private Professional Fiduciaries – A growing profession is licensed individuals who specialize in serving as administrators, trustees and conservators.

Certified Public Accountants – Great with numbers they often are a great choice to serve as a trustee. However, if they do tax work they can become difficult to reach from March 1 until April 16th!

Attorneys – Like CPAs, attorneys have a license to protect. They also understand a fiduciary duty and conflicts of interest.

In my opinion these are the main options beyond family and friends. Any of the above can be bonded to provide a little extra security to your loved ones. By utilizing one of these people in your estate plan you decrease the chances of there being problems in the administration of your will or trust!

Contact me to discuss what option would be best for you and your family!  -John

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Professional Fiduciaries

Last week I had a professional fiduciary named as Administrator in one of my probate cases here at the Sacramento county probate Court.  Professional fiduciaries are a great choice to serve as administrator when there is fighting, or potential fighting, between family members. They are licensed by the state and can be bonded. In fact, there is a whole list of them at www.pfac-pro.org which serves all of California.

In this case the siblings get along ok but nobody could agree who should serve as administrator of their dad’s estate. Rather than have to face the issues of who trusted (or didn’t trust) who we opted to go with the professional. I think this is going to work out for everybody.

The cost is not great as the professional fiduciary gets the same administrators fee as laid out in the probate code that any administrator would get. That is, the professional gets paid the same as the family member would get. It thus makes great economic sense to use a professional! 

I guess the key here is don’t let potential in-fighting delay the start of probate.  Get someone going so the 7 month probate clock starts ticking!

I will paste all of that probate code section below.

Call or email me with questions or visit our probate website at www.californiaprobate.info

-John

California Probate Code Section 10800

(a) Subject to the provisions of this part, for ordinary
services the personal representative shall receive compensation based
on the value of the estate accounted for by the personal
representative, as follows:
   (1) Four percent on the first one hundred thousand dollars
($100,000).
   (2) Three percent on the next one hundred thousand dollars
($100,000).
   (3) Two percent on the next eight hundred thousand dollars
($800,000).
   (4) One percent on the next nine million dollars ($9,000,000).
   (5) One-half of one percent on the next fifteen million dollars
($15,000,000).
   (6) For all amounts above twenty-five million dollars
($25,000,000), a reasonable amount to be determined by the court.
   (b) For the purposes of this section, the value of the estate
accounted for by the personal representative is the total amount of
the appraisal value of property in the inventory, plus gains over the
appraisal value on sales, plus receipts, less losses from the
appraisal value on sales, without reference to encumbrances or other
obligations on estate property.