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In the context of personal representatives (executors, administrators, guardians, and trustees), a fiduciary is an individual in whom another (the will-maker, trustor, court) has placed the utmost trust and confidence in to manage an estate or a trust.
Fiduciary is from Latin fiducia, meaning “trust,” a fiduciary such as an executor, administrator, or trustee has been given the authority and power by the court to act on behalf of the beneficiaries under circumstances which require the utmost level of trust. The fiduciary must act honestly, honorably, and in good faith, and their actions must be completely transparent at all times.
The most common trustees include the trustee of a trust or the personal representative of a probated or administrated estate. Characteristically, the fiduciary has a higher level of knowledge and expertise about the matters being handled; for example, a trustee will often know diversifying investments while the beneficiaries of a trust will not.
Fiduciary duty imposes an arguably stricter standard of behavior, and a fiduciary commits not to be in a situation where his or her interests and fiduciary duty conflict. To further explain, a fiduciary should not have a conflict of interest, and this theory certainly applies to the management of estates and trusts. Some examples of a breach (break) in fiduciary duty include:
If a beneficiary to an estate or a trust believes that a personal representative or a trustee has breached their fiduciary duty, they can bring the matter before the court. If the court determines that the fiduciary has failed in any one or more of their duties, the fiduciary can be held personally liable for any harm done to the estate or trust assets. The court can also order the removal of the executor, administrator, or trustee.
To learn more about the personal representative’s or trustee’s legal obligations, please contact a Rossford probate attorney from Heban, Murphree & Lewandowski, LLC today!