Fiduciaries are people entrusted with making decisions related to a deceased person’s estate.
Yet, they cannot just make any decision they please. They are required to make all their decisions with the best interests of the beneficiaries and/or the estate in mind. This is their fiduciary duty.
How does that work in practice?
Typically, the deceased will have chosen one or more fiduciaries while still alive and formalized their choices in a legal document. These can include an executor of the estate and trustees to manage any trusts they create. They may be people who work in a relevant profession or just those who the deceased trusted.
If the deceased did not nominate anyone to execute the estate, the probate court would pick someone.
How do you define fiduciary duty?
The person holding the fiduciary duty has, in effect, to show they are worthy of the trust placed in them. If they are honest and diligent, there should be no problem. Yet some will use their power for self-serving reasons or fail to put in adequate time, effort or care, leading to the loss of estate assets.
Another type of fiduciary is the legal guardian of a child. They might be called upon if the child is still a minor when their parents die. In this case, the guardian will have a fiduciary duty to make decisions that are in the child’s best interests. They might have financial responsibility and be in charge of the day-to-day caring, or they may receive money from a financial fiduciary for the child’s care. Breaches of duty could include mistreating the child or spending the allocated money on themselves.
If you have concerns about whether someone is fulfilling their fiduciary duty, there may be legal options available.