People often think of naming family members or other loved ones during the estate planning process to handle the administration and distribution of their estate as a personal representative. This is an integral part of estate planning and often conveys a significant amount of trust in the individual chosen.
In some cases, however, you do not have a loved one who would be well-suited for the role, or appointing a particular person would cause conflict with others. In some limited circumstances, it makes more sense to hire an outside party as a fiduciary instead of asking a loved one to take on that responsibility.
Before you decide to hire an outside party to take on the role of a fiduciary, you should consider this.
What obstacles you are trying to overcome?
For some families, choosing one person over another would create conflict and a potential dispute over the validity of your estate plan. In other cases, the only options are people who are too young or who cannot otherwise qualify as a personal representative, or have the time or ability to oversee the distribution of your estate.
When you consider who you will name as the personal representative for your estate, there may be alternatives that you haven’t considered. While hiring an outside party can help you overcome some issues, there may be other ways to solve the problems.
Consider contingencies
In some cases, your loved ones may live very far away. Asking them to be your personal representative could be a responsibility they just cannot fulfill. Before deciding that they cannot take on the role, talk to them about what they are willing to do and if they are able to take on the responsibility.
You may also have family members who are not old enough to take on the responsibility of personal representative, but who may come of age before you pass away. Rather than ruling them out, consider creating a plan to include what would happen if you die before they are old enough to serve.
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