Understanding The Fiduciary Duties Of An Executor
If you are appointed as the Executor or Administrator of an estate, it is natural that you will want to do your job correctly. Beyond that, though, an executor is known as a fiduciary.
According to Black’s Law Dictionary, a fiduciary is a person who must act primarily for the benefit of another. As the Executor, your fiduciary duty is to act in the best interests of the beneficiaries of the estate. Your fiduciary duties also include a duty to follow the terms of a will and to follow the legal requirements of administering an estate. Fulfilling your fiduciary obligations requires care and diligence.
Your fiduciary obligations to beneficiaries
Where a conflict exists between your personal interests and the interests of the beneficiaries, you must act in the interest of the beneficiaries. This does not mean you do everything each beneficiary wants. Indeed, beneficiaries may have conflicting desires, like in the case where one beneficiary wants to retain the family residence and the other wants to sell the residence. A fiduciary in this situation would need to consider not only each beneficiary’s wishes but also the needs of the estate as a whole. If there is not enough cash in the estate and you keep the property, how will you pay taxes and debts? As a fiduciary, you have the right to exercise your discretion, and the test of whether that discretion was properly exercised is whether it was done in the best interests of the beneficiaries and the estate or for the convenience of the Executor. The former is acting in a fiduciary capacity and the latter could be a breach of your fiduciary duty.
Your ability to seek help
As the Executor, you must accomplish a variety of tasks within strict time frames. To comply with your fiduciary obligations, though, you do not necessarily have to do everything by yourself. Indeed, it is not uncommon for executors to work with attorneys, accountants, real estate agents, and other professionals. The deceased person’s estate pays for the services of these individuals.
Your legal exposure
Because you have a fiduciary duty as the Executor or Administrator, you are exposed to legal liability for your acts as the personal representative of the estate. You could be surcharged or otherwise bear personal financial liability if you are found to have breached your fiduciary duty. An experience probate attorney can help you navigate your fiduciary duties so that you can sleep soundly, knowing that you are fulfilling your legal obligations.
