Choosing a Fiduciary: It’s a Job, Not a Reward

By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold NJ Estate Administration Attorney

We spend about 45 years of our lives slaving to provide for our retirement and to leave a legacy for our family.  By some standards, that’s approximately 85,000 hours at work, probably more.  So tell me, why so many of us spend so little time deciding who will protect our life’s savings if we become incapacitated before our death and then after we die?

The decision of who will serve as the personal representative of your estate or the trustee of your trust (collectively, your “fiduciaries”) should be one of the most important decisions you make during the estate planning process, yet this decision is often made thoughtlessly or in haste. There are many options available to you when selecting your fiduciaries.  You may decide to name a single family member, trusted advisor, bank or trust company, or you may decide to name multiple fiduciaries to manage your estate and/or trust.

It is very common for an individual to name a surviving spouse, child or other family member to serve as the fiduciary. There are plenty of advantages to naming a family member, including the fact that they often will serve without charging a fee. Because they have a personal stake in the estate or trust and probably are familiar with you and our values, they may know some of the more intimate details associated with your family and assets.  As such, a family member may have a greater understanding of your estate planning goals and objectives.

Naming a family member as your sole fiduciary may also have some significant disadvantages. For example, the person named may be overcome with grief, become ill or become disabled and be unable to act in the future, particularly if he or she is an aging spouse. The family member serving as the fiduciary may encounter conflicts among siblings, more distant or estranged beneficiaries or lack of skills to distribute and divide the assets.  In the case of a second marriage, conflicts often develop between the new spouse and the children of the deceased parent. Finally, the individual may lack the time, organization skills or intellectual ability to serve as the fiduciary. An alternative to naming a family member is to name a bank or trust company to serve alone or as co-fiduciary with a family member. Naming a professional or corporate fiduciary has many benefits, especially when it comes to actually administering the estate or trust.  Because of the considerable experience these fiduciaries have with estates and trusts they understand the accounting, tax and compliance issues associated with estate administration and therefore will often be more efficient. Further, because they don’t have a stake or personal interest in the administration, a bank can be more objective and impartial when making decisions regarding distributions to beneficiaries.  Finally, a corporate trustee will provide experienced and professional investment advice.

Naming a professional or corporate trustee also has some disadvantages, including the fees for their services and their investment decisions may be more conservative than the beneficiaries’ desire. However, fees charged by a corporate fiduciary may be no more than an individual trustee pays to delegate the investment decisions to a professional advisor or a paid CPA or attorney to assist with the income tax issues, and conservative investments may not be bad.

In making decisions regarding fiduciaries, it is important to select someone who is financially responsible, stable, trustworthy and organized and has enough time to handle all of their responsibilities. All too often, this decision is based solely upon the desire to avoid fees charged by professionals, banks or trust companies. However, when selecting a fiduciary it is important to think of the appointment as a job, not a way to reward (or punish) that chosen person. The question to ask is, would you hire that person to run your business or your household while you’re alive? If not, why put them in charge after you’re gone?

If you have questions regarding estate planning or estate administration in New Jersey, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at  You can also visit our dedicated sites at,, and