Choosing who or what group in New York is best suited to manage your finances after your pass is always a tough decision – and all the more so when complicating factors are present.
Deciding whether to appoint family members as fiduciaries
In many cases, it might make sense to appoint a trusted and loved individual close to you to look after your affairs. However, choosing a child or spouse as the fiduciary does have some potential drawbacks.
For example, you might not be sure of the ability of family members to diligently and faithfully administer your trust, or your children might be too young to serve in that capacity.
In these situations, you might want to consider a corporate fiduciary. Let’s discuss briefly the pros and cons of that option.
Pros of corporate fiduciaries
A corporate fiduciary is a professional entity – usually a bank or a similar organization, with the institutional capacity to govern complex financial arrangements – that manages your affairs in a professional manner consistent with all local New York laws.
The benefits of probate and estate administration include their expertise in managing finances wisely, their neutrality (they won’t play favorites or get involved in intra-family power dynamics), the all-inclusive nature of their services (such as accounting, investing, brokerage, etc.), and the high standards they adhere to as professional, licensed firms.
The cons of corporate fiduciaries
Corporate fiduciaries do have some drawbacks compared to management by a close friend or family member. First, they charge market rates for their services, which could prove a costly endeavor over time. Second, they rule by committee, which carries all the negatives of bureaucracy (slow response times, difficulty in decision-making, etc.).
Weigh these advantages and disadvantages carefully when considering whether a corporate fiduciary is right for managing your personal estate.