The fine art of informing your fiduciaries

Greg Schlender, JD’78, an expert in estate planning, asset protection, and elder law and founder of Schlender Law Firm in Boulder, Colorado, shares advice on executors, trustees, agents, and other personal estate representatives.

At the end of the day, when all of the decisions have been made and documents have been signed, many estate-planning clients still have one question: Should I tell my fiduciaries that I’ve nominated them as executor, health-care agent, or guardian?

The answer to the question is yes; unless you have an extraordinary circumstance that makes secret keeping best for the time being, you should absolutely inform your fiduciaries that they’ve been named. Most fiduciaries will be honored to know that you place such trust in them. This is not to say that you need to explain the entirety of your estate plan or even tell them in which order they’ve been named, but it is polite to let someone know that you’ve nominated them for a role.

Health-care agents especially need to know that they’ve been nominated: They will need a copy of your HIPAA authorization in order to get information from the hospital staff. They’ll also need a copy of your health-care directive, both to prove their authority and to make medical personnel aware of your wishes for treatment.

It is important to let your fiduciaries know that being nominated places them under no legal obligation. If, when the time comes, they are unwilling or feel that they are no longer prepared to take on the responsibility, they are perfectly free to decline. This is why it is also important to nominate secondary or back-up fiduciaries.

Part of the process of informing your fiduciaries is preparing them. Give them the name and contact information of your attorney, and let them know if the attorney is available to answer their questions. Let them know where a copy of your estate plan can be found so they aren’t flying blind when something happens to you. If you feel comfortable, inform them of the finer points of your plan, your specific wishes, and help prepare them for the role they may someday step into.

Telling your fiduciaries how much faith you have in them and how important they are to you can be a very moving process. The conversation often has the unexpected result of opening the eyes of both parties to the quality of the relationship and bringing you even closer together.

If you appoint a family member or friend to serve as fiduciary, consider providing reasonable compensation for his or her time.