“Fiduciary duty” is a legal responsibility trustees, agents, and executors in California must uphold when managing someone else’s estate or assets. This responsibility includes acting in good faith, avoiding conflicts of interest, and ensuring that all decisions benefit the beneficiaries of an estate or trust. Having an understanding of this duty when creating your estate plan is essential to ensure your wishes are followed.
As seasoned Orange County estate planning lawyers, the team at OC Wills & Trust Attorneys fully understands the importance of choosing the right fiduciary and what this means for your legacy. This guide from OC Wills & Trust Attorneys will give you a better understanding of why the right fiduciary can preserve your legacy and what these fiduciary duties look like.
Key Qualities to Look for in a Fiduciary
Choosing the right fiduciary is one of the most important steps in creating a secure and reliable estate plan. A fiduciary’s role is to act solely in the best interest of your beneficiaries, manage assets responsibly, and ensure your wishes are respected. To fulfill these responsibilities, a fiduciary should possess certain qualities that help prevent conflicts and protect your estate.
Here are main qualities to look out for in a beneficiary:
- Integrity and Trustworthiness: A fiduciary should be someone you can trust to act in the best interest of your beneficiaries, which is why integrity is essential.
- Financial Acumen: Managing an estate involves handling finances, like taxes, investments, and distributions. Choosing a fiduciary with the knowledge and ability to work with money confidently in this capacity is essential to ensure compliance with financial obligations.
- Objectivity: Select someone who can make unbiased judgements for the good of the estate is critical to protecting your wishes.
- Attention to Detail: Fiduciaries handle extensive documentation and must comply with legal requirements to protect the estate, so this quality is necessary for ensuring all processes and requirements are met.
Selecting a fiduciary with these qualities can help ensure your estate is managed responsibly and according to your intentions, giving you peace of mind in your planning.
Fiduciary Duty for Agents
Agents with power of attorney hold a fiduciary duty to act in the best interests of the person (or “principal”) who granted them this authority. Their primary responsibility is to manage the principal’s financial and legal affairs according to the instructions provided in the power of attorney document.
An agent’s responsibilities may include handling the principal’s bank accounts, paying bills, managing property, or making healthcare decisions on the principal’s behalf. Agents must always act with care, loyalty, and honesty to make sure their actions benefit the principal, not themselves.
Like trustees, agents must also keep accurate records of all transactions and decisions they make on the principal’s behalf. Transparency is key, as agents must be able to account for their actions and provide documentation if the principal or the courts request these records.
Fiduciary Duty for Executors
Finally, executors have a fiduciary duty to manage and settle a deceased person’s estate with care, integrity, and loyalty. Their primary responsibility is to distribute the estate’s assets according to the terms of the deceased’s will while complying with California law. This duty includes gathering and protecting the assets, paying off any outstanding debts or taxes the estate owes, and distributing the remaining assets to the deceased’s beneficiaries.
Executors must act in the best interests of both the estate and beneficiaries. They must avoid conflicts of interest and cannot use the estate’s assets for personal gain. Executors must also keep accurate records and provide regular reports to the estate’s beneficiaries. This step helps ensure transparency throughout the process.
How Choosing the Right Fiduciary Protects Your Legacy
Finding the right fiduciary can be overlooked when estate planning, although it is one of the most important parts of the process. We know all the ins and outs of estate planning in California and have created this Executor Trustee Workshop video for our clients to ensure you have as much knowledge as possible when planning for the future.
The legal team at OC Wills & Trust Attorneys is here to help ensure your legacy is protected. From inception to creation and appointment of a fiduciary, we aim to guide you through the creation process, making sure every decision supports your vision for the future. Call us today or complete our contact form for a consultation.
