During the course of setting up your estate plan, you'll be asked to name a variety of fiduciaries to act on your behalf in certain situations. Find out who can and can't serve and why.
Adults Only Can ServeAll states require that a person serving as a fiduciary must be over the age of 18 or 21. The exact age depends upon the state laws where the fiduciary will be carrying out his or her duties. Note that if you appoint someone to serve as your fiduciary who is under the age required by your state's law, then that person won't be allowed to serve and the successor you've named (if any) will serve instead.
Family and Friends May or May Not be Allowed to ServeIn most cases your adult family members related to you by blood or marriage will be allowed to serve (but see the restrictions listed below for certain types of trusts.) With friends, however, you need to make sure that your state doesn't have any specific laws restricting non-family members from serving on your behalf. For example, in Florida, your Personal Representative must either be related to you by blood or marriage or a Florida resident in order to serve. Thus, if you're a Florida resident and you name your friend in Maryland to serve as your Personal Representative, your friend won't be allowed to serve.
U.S. Citizens and Foreign Residents May or May Not be Allowed to ServeSubject to state law restrictions addressed above and specific trust restrictions listed below, anyone who is an adult and a U.S. citizen who has not been convicted of a felony will be allowed to serve as your fiduciary. Regarding foreign residents, they will subject to the same restrictions as U.S. citizens and may be required to post a bond if serving as a Personal Representative, Trustee, or Attorney in Fact. Also, certain types of trusts, such Qualified Domestic Trusts, require that at least one Trustee be a U.S. citizen or an institution authorized to provide trust services in the U.S.
Professional Advisors May or May Not Be Able to ServeYour professional advisors such as attorneys, accountants, and financial advisors will generally be allowed to serve, however, many decline because of the increased cost of liability insurance. In addition, professional advisors may have a conflict of interest acting as both a fiduciary such as a Trustee and also as the investment advisor for the trust assets. One bonus of having your attorney serve as your fiduciary is that the attorney may agree to only charge one fee. For example, your attorney could bill your estate for serving as the attorney for the estate and also bill for serving as the Personal Representative, but the attorney may agree to only bill as the attorney for the estate.
Institutions May or May Not be Allowed to ServeInstitutions, such as independent trust companies and banks with trust departments, will only be allowed to serve as fiduciaries in states where they are licensed to act. If you decide to choose an institutional fiduciary, be sure to confirm that it's licensed to provide the fiduciary services you're looking for in your state.
Beware: Certain Types of Trusts Restrict Who Can Serve as TrusteeIn many cases, irrevocable trusts are designed to exclude the trust assets from the Trustmaker's estate. If this is the desired goal of the trust, then the Trustmaker and, in some cases, even the Trustmaker's spouse and descendants, won't be allowed to serve as Trustees. Aside from this, irrevocable trusts that are authorized by state or federal law, such as the Tennessee Investment Services Trust or the Qualified Domestic Trust, have specific restrictions on who can and can't serve as Trustee built right into the laws governing them.