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What is fiduciary duty?

On Behalf of | Nov 29, 2022 | Probate |

The executor handling an estate or the trustee managing trust assets will have a major impact on the inheritances of the beneficiaries. They typically have a responsibility to comply with state law and the instructions provided by the testator throughout the probate process. 

The actions that they take or the mistakes that they make could increase or substantially diminish someone’s inheritance. The law creates a fiduciary duty between the person managing estate assets and those intended to benefit from the estate or trust. 

What does that mean for the beneficiaries during probate? 

Fiduciary duty involves prioritizing someone else’s needs. When one party has a fiduciary duty to another, they are legally obligated to act in the best interests of the other party. Some professionals have fiduciary duty to their clients, and those tasked with managing financial resources for others, including trustees, also have a fiduciary duty. 

For example, the trustee could potentially profit from their position by hiring their own business to provide support services to the estate. However, they should instead hire the lowest bidder that can do a competent job to minimize the drain on estate resources. 

People sometimes refer to a trustee or an executor as a fiduciary because of their role, which involves financial and legal authority leveraged for the support of others. If the fiduciary with control over your inheritance has mismanaged those resources or put their own interests above yours, you may need to ask the probate courts to remove them from their role. 

When you understand what fiduciary duty is, you can better determine if someone has failed to uphold their duty to you. Learning more about probate law can help those who expect to benefit from an estate.