Naming More Than One Fiduciary In Your Will Or Trust

Wills and trusts are legal documents that provide instructions for the distribution of your assets after your death. In New York State, as in all states, the administration of a decedent’s estate must follow specific rules.

The person who writes the will is generally called the “testator.” The person who creates the trust is typically called the “grantor” or the “settlor.” The person responsible for the administration of the decedent’s estate or the settlor’s trust is called an executor, administrator, trustee or guardian, depending upon the circumstances. This person is also referred to as a “fiduciary.” The fiduciary has important duties to perform. The assets of the decedent’s estate must be collected and the debts and obligations of the decedent must be paid if there are sufficient funds in the estate. The fiduciary must also comply with strict requirements for notifying persons who have a legal interest in the estate of any matters that may affect those interests. It is the responsibility of the fiduciary to manage the estate carefully.

While it’s common to appoint a single fiduciary to oversee a trust or will, there are some compelling reasons to consider having two fiduciaries. 

The Benefits of Having More Than One Fiduciary

When you’re engaged in estate planning, having two fiduciaries adds a layer of checks and balances to the probate and estate administration process. Estate matters can be complex, involving intricate financial transactions, legal considerations, and emotional dynamics among beneficiaries. By appointing two fiduciaries, you create a system where estate administration decisions are subject to scrutiny and discussion, reducing the risk of errors or misconduct. Each fiduciary can provide oversight and accountability to the other, ensuring that no single individual has unchecked authority.

Moreover, dual fiduciaries offer complementary skills and perspectives that can enhance the administration process, if properly chosen. Estate administration often requires an expansive set of skills, including financial acumen, legal knowledge, interpersonal skills, and organizational abilities. By appointing two fiduciaries with different strengths and backgrounds, you can leverage their combined capabilities to address various aspects of trust and estate administration more effectively. 

Furthermore, having two fiduciaries can help mitigate the risk of conflicts of interest or undue influence. In cases where a single fiduciary holds significant power, there’s a heightened potential for conflicts to arise. This could be due to personal biases, competing interests, or external pressures exerted on the fiduciary. By appointing two fiduciaries who must collaborate and agree on trust and estate administration decisions, you create a system where decisions are made transparently and with the beneficiaries’ best interests in mind. This can help preserve the integrity of the testator’s or grantor’s plan and minimize the likelihood of disputes or litigation among family members.

Another advantage of having dual fiduciaries is continuity. Who knows what changes may arise between the time a fiduciary is named in the document and the testator or grantor dies. Circumstances change over time, affecting the ability of a single fiduciary to fulfill their duties effectively. Illness, incapacity, relocation, or death could disrupt the administration of the trust or will if there’s no contingency plan in place. By appointing two fiduciaries, you create a vehicle for continuity, ensuring that the estate’s affairs can continue smoothly even if one fiduciary becomes unavailable. 

The Downsides of Having More Than One Fiduciary

Despite the many positive and compelling benefits of naming more than one fiduciary, there are also downsides to this decision. These include:

• Conflict and Disagreement: Having two fiduciaries could potentially lead to disagreements or conflicts between them. If they have significantly differing opinions on how to administer the estate or make decisions regarding beneficiaries, it could result in delays or complications in the probate process.
• Coordination Issues: Coordinating the efforts of two fiduciaries may prove to be more challenging than having a single fiduciary. Communication and decision-making processes may become cumbersome, especially if the fiduciaries have conflicting schedules or differing priorities.
• Increased Administrative Burden: With two fiduciaries, there may be duplication of effort in certain tasks, which could lead to increased administrative burden and inefficiencies. For example, both fiduciaries may independently review and approve the same documents or transactions, leading to unnecessary delays.
• Potential for Bias or Favoritism: In some cases, one or both fiduciaries may exhibit bias or favoritism towards certain beneficiaries, leading to perceived or actual unfairness in the distribution of assets or the decision-making process.
• Complications in Decision-Making: While appointing two fiduciaries can provide checks and balances, it could also complicate the decision-making process, particularly if the fiduciaries have divergent views on important matters related to the estate.
• Increased Costs: Having two fiduciaries may result in higher administrative costs associated with the estate. This could include additional fees for legal or financial services needed to facilitate communication and collaboration between the fiduciaries.
• Potential for Strain on Relationships: Serving as a fiduciary can be a demanding and stressful responsibility. If there are tensions or conflicts between the fiduciaries, it could strain their relationship and potentially lead to long-term damage, particularly if they are family members or close associates.
• Complications in Succession Planning: If one of the fiduciaries becomes unable or unwilling to serve, it may complicate succession planning. Identifying and appointing a replacement fiduciary could introduce additional delays and uncertainties into the estate administration process.

Contact Davidow, Davidow, Siegel & Stern, LLP

The decision to name one or more fiduciaries in your trust or will is a uniquely personal decision. However, a Long Island Will Attorney can help you analyze the pros and cons of naming a single fiduciary or multiple fiduciaries in your estate planning documents. 

At  Davidow, Davidow, Siegel & Stern, LLP  we have many years of experience helping our clients resolve questions just like these. In fact, we have more than 100 years of providing compassionate legal counseling services for our clients. Our focus on Elder Law, Special Needs, and Estate Planning educates the public and professionals on the needs of the aging population. Contact us today.