Why Hiring the Right Fiduciary is Critical

shutterstock_217936621The importance of finding the right Professional Fiduciary was brought to light with the unfortunate, cautionary case of a Bay Area fiduciary whose license was recently revoked after dozens of clients were bilked of more than $16 million.

Christine Backhouse was stripped of her State license after a yearlong investigation found she was partially to blame for the millions of dollars in losses after failing to adequately supervise her business associate and longtime boyfriend Leo Kennedy, who was sentenced to federal prison for diverting funds from the accounts of approximately three dozen clients of Backhouse Fiduciary Services.

According to the seven-page accusation from the Department of Consumer Affairs’ Professional Fiduciaries Bureau, Backhouse “gave a third-party unfettered access to her clients’ assets that she was charged with protecting.”

When considering hiring a fiduciary, the Bureau’s website (www.fiduciary.ca.gov) can verify that they are licensed with the State, and will show any previous citations or disciplinary actions. The Bureau also recommends interviewing at least three candidates when seeking a professional fiduciary to manage a client’s personal affairs such as daily care, housing, and medical needs, as well as financial duties ranging from paying bills to managing a trust.

The Bureau has a checklist of questions to ask fiduciary candidates about many essential issues, including the use of internal controls, a succession plan, and the frequency of accounting reports.

In addition to online resources, including a consumer resources list of website links for seniors and those with special needs, the Professional Fiduciaries Bureau can be reached at (916) 574-7340 or by e-mail at fiduciary@dca.ca.gov.

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