The estate planning process is about more than writing a will or setting up trusts. It also means selecting individuals to handle important responsibilities. These individuals, known as fiduciaries, must act in the best interests of others. Their roles are central to ensuring that the wishes of the person creating the estate plan are carried out properly.
Multiple fiduciary roles may be part of an estate plan. An executor (or personal representative) is responsible for managing the estate after death. This includes paying debts and distributing assets. A trustee manages any trust that holds property or money, often for the benefit of children or other beneficiaries. A power of attorney allows a person to act on someone’s behalf during their lifetime, typically for financial or medical decisions.
What fiduciaries are expected to do
Fiduciaries must follow clear rules. These include acting in good faith, avoiding conflicts of interest, keeping accurate records and being loyal to the interests of the person or beneficiaries they serve.
For example, a trustee must manage trust assets carefully and make decisions that support the trust’s purpose. A personal representative must follow the terms of the will and meet legal deadlines.
When fiduciaries fail in their duties
Sometimes, fiduciaries breach their duties. This may involve misusing assets, neglecting responsibilities or acting in their own interest (self-dealing). A breach can harm beneficiaries or cause delays in the estate process. If concerns arise, beneficiaries or interested parties can ask a court to review the fiduciary’s actions. In serious cases, the fiduciary may be removed or required to repay misused funds.
Understanding fiduciary roles helps make estate planning more effective and helps protect the interests of everyone involved. Seeking legal guidance to find out more about key roles in estate planning is important.
