Much of estate planning concerns legal documents such as wills and trusts. However, it requires an executor or trustee to implement the instructions in those documents.
The executor executes the will and trustees manage the assets held in trusts. These are fiduciary roles. On the whole, being a fiduciary means acting in the best interests of the beneficiaries, and that means observing the following:
The duty of care
Fiduciaries owe a duty of care to the beneficiaries of a trust or will. This means that they must act reasonably and refrain from negligent behavior. For example, a trustee may be tasked with making investments. These investments should be in the best interests of the beneficiaries and should not be reckless. If a trustee does make a reckless investment, then they have breached their duty of care.
Duty of loyalty
Loyalty is a very important fiduciary duty. In terms of an executor, they have been put in a position of trust. The testator of the will may have trusted them with distributing assets and even ensuring that guardians look after minor children.
The executor has to live up to the expectations of the testator once they have agreed to take the role. A breach of duty of loyalty may include something like making investments with estate assets for personal profit. This is a breach of fiduciary duty known as self-dealing.
Fiduciaries must be impartial, loyal, honest and careful. Should they fail in these duties, then a legal challenge can be made. Seeking further guidance can help you learn more about fiduciary roles in estate planning and when litigation might be necessary.
