Critical Estate Planning and Your Fiduciaries: Who They Are and Why Your Choice Matters

Planning for the future, whether due to disability, death, or unforeseen circumstances, can feel overwhelming. Protecting what you’ve built and making sure your wishes are honored is crucial. That’s where the role of your fiduciaries comes in: trusted individuals appointed by you to manage your finances, healthcare decisions, and estate when you are unable to do so yourself.

Fiduciary roles include agents under a power of attorney, health care agents, trustees, and executors. Each carries significant responsibility and a legal duty to act in your best interests with care, honesty, and loyalty. Choosing wisely is key. It can make the difference between a smooth process and unnecessary stress for your family.

The Benefits Fiduciaries Bring
Appointing capable fiduciaries can protect your assets, pay bills on time, manage investments responsibly, and ensure your health care wishes are honored. Executors and trustees must faithfully carry out your instructions, safeguarding your legacy and minimizing confusion. The right fiduciary helps reduce family tension and keeps your affairs running smoothly during difficult times.

Who Should You Pick?
The right choice balances personal trust, capability, and the complexity of your assets and wishes.

Many people choose spouses, children, trusted relatives, or close friends as fiduciaries. However, for complex estates or situations where those individuals may not be ideal, professional fiduciaries—such as banks, trust companies, or law firms—offer impartiality, technical expertise, and experience.

These professionals charge for their services, and Virginia law permits “reasonable compensation.” Fees can be set by you, or there are statutory defaults. For many families, the investment is worthwhile to ensure legal compliance and minimize disputes, or if they lack a trusted person to name as a fiduciary.

Potential Risks — How to Protect Yourself
Of course, fiduciary power can be misused, leading to risks such as self-dealing, neglect, or financial exploitation. Virginia law offers certain safeguards to mitigate these risks when complaints are made and investigations are conducted. In cases of abuse, court oversight can remove fiduciaries, order restitution, or impose penalties. Families should remain vigilant for warning signs like unusual financial activity or missing assets, and maintain open communication to prevent potential problems.

Best Practices Every Fiduciary Should Follow
To succeed, fiduciaries must act with loyalty, stay within their authority, and keep accurate records of all financial activity. Executors must file accountings with the Commissioner of Accounts, and trustees and agents under a power of attorney must also maintain documentation. Meticulous records—such as receipts, bank statements, and contracts—not only protect the principal but also shield fiduciaries from allegations of mismanagement.

In short, thoughtful selection and oversight of fiduciaries are essential. The people you appoint should embrace their duties with diligence and integrity, because the right fiduciary can protect your assets, honor your wishes, and provide peace of mind. Your powers of attorney, health care directives, Last Will and Testament, and Trusts in Virginia are not only a good idea but often necessary. Proper oversight and planning ensure a solid estate plan. Before moving forward, consult an experienced elder law attorney to help guide you and ensure your plan works as intended.