Selecting the Right Fiduciaries: Trustees, Agents, and Executors

What should you consider when choosing trustees, agents, and executors?

Choosing fiduciaries is one of the most consequential decisions in estate and financial planning. A carefully chosen trustee, agent, or executor preserves your wealth, carries out your wishes, and minimizes family conflict. Choose poorly and you may face delays, higher costs, or mismanagement.

Below is a practical guide to understanding fiduciary roles, assessing candidates, and documenting backup plans. The guidance draws on common-law fiduciary principles and resources from the IRS and Consumer Financial Protection Bureau, and reflects professional experience advising clients on estate administration.

Quick primer: who does what?

• Trustee: manages assets held in a trust according to the trust document and state trust law. Duties include investing prudently, following distribution rules, keeping records, and reporting to beneficiaries.
• Agent (under power of attorney): acts for you while you’re alive. A financial agent handles bank accounts, taxes, and transactions; a medical (healthcare) agent or healthcare proxy makes medical decisions under your advance directive.
• Executor (personal representative): administers the decedent’s estate through probate (if applicable), pays debts and taxes, locates and inventories assets, and distributes property under the will.

These roles overlap in purpose—protecting your interests—but differ in timing, scope, and legal procedures.

(For more detail on the trust role, see our Trustee glossary entry: “Trustee”.)

Core fiduciary duties to expect

Every fiduciary owes several core duties. Make sure candidates understand and can carry them out:

1. Loyalty — act solely in your interest, avoiding conflicts and self-dealing.
2. Prudence — manage assets with the care a reasonably prudent person would use (investing, recordkeeping).
3. Impartiality — treat beneficiaries fairly when multiple beneficiaries have competing interests.
4. Accountability and disclosure — keep accurate records and provide reports or accountings as required.

These duties are enforceable in court. State law sets many specifics; the American Bar Association summarizes fiduciary duties and best practices for counsel and fiduciaries (see ABA guidance cited below).

How to evaluate a candidate: a practical checklist

Use this checklist when selecting trustees, agents, or executors:

• Competence and relevant experience: Does the person have financial, tax, or legal experience? If not, are they willing to hire professionals (CPA, attorney, investment advisor)?
• Availability and location: Are they available when needed? If your estate spans states, choose someone who can coordinate multi-state issues or name a local successor.
• Impartiality and temperament: Can they make unemotional, fair decisions—especially when family dynamics are sensitive?
• Age and longevity: Prefer someone younger or name reliable successor fiduciaries; avoid an executor near retirement if your estate plan will be active for many years.
• Willingness and communication skills: Have the candidate agree in advance and understand expectations; clear communication prevents disputes.
• Bonding and insurance: Determine whether a bond is required or advisable; many trust documents require or waive bonds.
• Cost and compensation: Understand compensation terms—family members often serve unpaid, while professional fiduciaries charge fees under state law or contract.

Professional fiduciaries (corporate or individual) are often a good fit when assets are complex or beneficiaries may contest decisions.

When to choose a professional fiduciary

Consider a professional trustee, corporate executor, or a bank trust department if any of these apply:

• High-net-worth or complex asset structures (closely held business, multiple investment types, real estate across jurisdictions).
• Potential for family conflict or contested inheritances.
• Need for ongoing asset management across many years (irrevocable trusts, dynasty planning).
• Lack of a trusted or capable family member.

Professionals bring systems for recordkeeping, tax coordination, and investments, but they charge fees and are not immune to disputes. Compare fees and services and read fee schedules carefully.

Common mistakes and how to avoid them

• Picking purely on emotion: family ties matter but should not override competence.
• Failing to name successors or co-fiduciaries: always name backups and consider co-trustees for checks and balances.
• Not aligning powers with the person: don’t give a single agent unlimited authority if that’s unnecessary; tailor powers in your POA or trust instrument.
• Overlooking state law nuances: some states require formalities, bonding, or have unique duties—work with counsel in relevant states.
• Assuming the role is inexpensive: probate, accounting, tax filings, and litigation can raise costs if the fiduciary lacks experience.

Interview questions to ask candidates

• Have you served as a fiduciary before? Describe the experience.
• How will you manage recordkeeping, tax filings, and communication with beneficiaries?
• Will you hire professional advisors, and who will pay those fees?
• Are you willing to be bonded or sign an indemnity agreement?
• How and how often will you report to beneficiaries?

Document answers and include them in your planning notes.

Duties specific to each role (short guidance)

• Trustees: follow the trust instrument, invest prudently, provide accountings, and distribute funds per trust terms. Trusts can avoid probate but add ongoing duties.
• Agents with POA: act within the scope of the power-of-attorney document—financial POAs typically end at death; healthcare proxies continue through incapacity.
• Executors: handle probate tasks—filing the will, inventorying assets, notifying creditors and beneficiaries, preparing final tax returns, and distributing assets. See our executor selection guide and tax-handling checklist for executors (internal links below).

(See our guide: “Choosing the Right Executor: Duties and Selection Tips” for an expanded checklist.)

Tax, probate, and administrative considerations

Executors and trustees must coordinate tax filings and may need to obtain taxpayer identification numbers for entities or estates. Tax rules (including estate and inheritance taxes) change; always consult the IRS for current requirements and the Consumer Financial Protection Bureau for consumer-facing guidance on estate settlement (IRS: https://www.irs.gov; CFPB: https://www.consumerfinance.gov).

For a focused how-to on tax steps after a death, review our article “Handling Tax Issues After a Taxpayer’s Death: Executor Actions and Filing.”

Sample clause language and successor planning

• Name primary fiduciary and at least two successors.
• State who may serve as co-fiduciaries and whether co-fiduciaries may act independently.
• Address compensation, bonding, and dispute resolution (mediation/arbitration clauses can reduce costly litigation).

Your attorney can draft precise language that fits your state’s law and your family’s needs.

Real-world outcomes (professional insight)

In my practice, cases where clients named an experienced professional trustee or a CPA as executor typically closed faster with fewer disputes. Conversely, well-meaning but unprepared family members often struggle with bookkeeping, tax deadlines, and creditor claims, creating avoidable delays.

A balanced approach: designate a trusted family member as primary and name a professional successor, or appoint a trusted family co-fiduciary alongside a professional to combine personal knowledge with technical competence.

Next steps and resources

1. Inventory your roles and assets today; identify candidates and ask them directly. 2. Work with an estate attorney to draft or update POAs, trusts, and wills. 3. Keep a current, signed, and accessible copy of key documents and provide guidance letters for fiduciaries.

Further reading on FinHelp:

• Trustee (glossary): https://finhelp.io/glossary/trustee/
• Choosing the Right Executor: Duties and Selection Tips: https://finhelp.io/glossary/choosing-the-right-executor-duties-and-selection-tips/
• Handling Tax Issues After a Taxpayer’s Death: Executor Actions and Filing: https://finhelp.io/glossary/handling-tax-issues-after-a-taxpayers-death-executor-actions-and-filing/

Authoritative sources cited:

• Internal Revenue Service — estate administration and tax filing requirements (https://www.irs.gov).
• Consumer Financial Protection Bureau — settling an estate and consumer guidance (https://www.consumerfinance.gov).
• American Bar Association — fiduciary duties and best practices (https://www.americanbar.org).

Professional disclaimer: This article is educational and does not provide legal or tax advice. Consult a qualified estate attorney, CPA, or licensed fiduciary for recommendations tailored to your situation.