Estate planning is an important process that offers security for you and your loved ones. Ultimately, only you know what your final wishes are, but you will most likely have to rely on professionals to ensure that they are carried out.
Professionals who are placed in a position to manage your property or finances are typically referred to as fiduciaries. People who hold such offices have a responsibility both to act conscientiously as well as in your best interests. If a professional fails to act accordingly, they open themselves up to the possibility of litigation.
Understanding the roles of fiduciaries could assist you during your estate planning process. Therefore, it is worth taking a closer look at fiduciary duties.
The duty of care
Fiduciaries must act to a high standard when carrying out work on your behalf. For instance, if you designate a person to oversee your financial transactions, they should be well-informed before doing so. If your finances are managed in a reckless manner, this could amount to negligence, which leaves the door open for you to pursue litigation.
The duty of loyalty
In short, fiduciaries are expected to act in your best interests at all times. Thus, they are not allowed to make a profit for themselves. In cases where a fiduciary has abused their position to make a personal financial gain, they may be liable for a breach of fiduciary duty.
The types of fiduciary involved in estate planning are:
- Estate executor- An executor has a vital role to play in distributing your estate. Ultimately, they ensure that your assets are given out in a way that reflects your final wishes.
- Trustees- Trustees are legally bound to manage your assets and finances in the best interests of the beneficiaries. They must not utilize trust assets to turn a profit.
If you have issues with a fiduciary, it is crucial to understand your legal rights.