Fiduciary duties are legal obligations that arise when one person is trusted to act on behalf of another. In the context of estates, certain individuals hold this responsibility and are expected to act with honesty, care and loyalty.
When a fiduciary breaches these duties, it can lead to financial harm, damaged relationships and a loss of trust. In some cases, it may also result in legal action or the removal of the fiduciary from their role.
Key fiduciaries in estate plans
Several people may act as fiduciaries during the estate planning and administration process. Executors manage a person’s estate after death. Trustees oversee assets that are held in a trust. Agents under a power of attorney make financial or healthcare decisions during someone’s lifetime. Each plays a vital role and is trusted to follow instructions and act in someone else’s best interests.
Fiduciaries must avoid self-dealing, act with loyalty and manage property carefully. They are expected to follow the terms in estate documents, communicate clearly with beneficiaries and keep accurate records. Their actions must always reflect the wishes of the person who created the plan or trust.
A breach can occur when a fiduciary misuses estate funds, makes reckless decisions or fails to follow the terms of the trust or will. Other examples include poor communication, failure to keep records or conflicts of interest. These actions can harm beneficiaries significantly.
What beneficiaries can do
If a fiduciary fails in their duties, beneficiaries can take action. They might request a formal account of the fiduciary’s actions, ask for their removal or seek compensation if losses occurred. If you suspect a fiduciary has breached their duties, it’s important to seek legal guidance.