​

FIDUCIARY AS TRUSTEE

​

The Trustee has the responsibility of carrying out the terms of the trust as set forth in a trust document. A trust can be created by the language found in a will or a document created during life. If the former, it is a testamentary trust; if the latter, it is a living trust. The trustee is usually a person named by the creator of the trust in the trust document. In some cases, the trustee cannot carry out his or her duties either because of incapacity or death. If there is no named successor trustee who can serve, the court has the responsibility of appointing a trustee, usually someone who is nominated by the trust beneficiary(s).

​

​

FIDUCIARY AS CONSERVATOR

​

The person who is legally appointed to manage the Conservatee's estate and/or person. A Conservatorship is a legal tool to provide management for the financial and/or personal affairs of individuals deemed by the court to be physically or mentally incapacitated. A Conservatee is a person who is the subject of a conservatorship. A Conservator of the Person is appointed by the court to assume responsibility for decisions regarding the health and welfare of a person. A person is determined by the court to be incapacitated when he or she lacks sufficient understanding or "capacity" to make or communicate responsible decisions concerning his or her daily living needs. A Conservator of the Estate is responsible for the prudent use and protection of the conservatee's assets. The conservator is responsible for inventorying, marshaling and managing all assets and benefits belonging to the Conservatee. The conservator receives income, pays obligations of the estate, applies for pensions, and organizes data for the preparation of income tax returns and other related duties.How is a Conservator appointed? Anyone who believes a person may need help with daily living activities and/or finances can initiate the process to appoint a fiduciary as a conservator. The concerned person may contact a fiduciary of choice to investigate the situation. If the fiduciary identifies sufficient need, he or she will retain an attorney to petition the probate court for appointment as conservator. How is the Conservatee protected? The probate court often appoints an attorney to represent the alleged incapacitated person. A court investigator is also appointed by the court to determine the need for a conservator and to recommend a suitable person to serve in that role. All issues and information are brought before a probate court judge who decides if the person is incapacitated or in need of protection and, accordingly, appoints a conservator. The appointed fiduciary is accountable to the court for his or her work. The fiduciary must report to the court and receive the court's approval in carrying out his or her responsibilities. The court requires the posting of a surety bond by the conservator, which is intended to protect the assets of the conservatee's estate.

​

​

FIDUCIARY AS PERSONAL REPRESENTATIVE

​

An individual appointed by the probate court to administer the estate of a person who has died, referred to as a "decedent." A personal representative will either act as an Executor if named in the will, or as an Administrator if not named in the will, or if there is no will. The personal representative inventories and safeguards assets, collects income, verifies and pays obligations, identifies and notifies heirs and beneficiaries, and distributes assets.

​

FIDUCIARY AS REPRESENTATIVE PAYEE

​

The person designated by the Social Security Administration or other retirement plans to receive the income and pay the expenses of an incapacitated individual.

​

​

FIDUCIARY AS AGENT UNDER POWER OF ATTORNEY

 

 

Agent under a Power of Attorney

 

Executor for senior with no spouse or family

 

Conservator for those who are mentally or physically incapacitated

 

 

FIDUCIARY DEFINITION

​

A fiduciary is a person who acts on behalf of another person, or persons to manage assets. Essentially, a fiduciary is a person or organization that owes to another the duties of good faith and trust.

 

​

A fiduciary is any person or institution that has the power to act on behalf of another in situations that require the utmost trust, honesty, and loyalty. But it's more than just the power to act. A fiduciary also has a legal obligation to act in a trustworthy and honest manner on behalf of those he represents. He must provide the "highest standard of care."

 

 

Fiduciaries can serve in any number of roles in your estate as well, both before and after your death. They can include accountants, attorneys, bankers, business advisers, financial advisers, mortgage brokers, and real estate agents. They're hired to act in your best interests and they must set aside their own personal motivations in favor of your goals and wellbeing.

 

YOUR PERSONAL REPRESENTATIVE OR EXECUTOR

​

This fiduciary is responsible for settling your estate in accordance with the directions included in your last will and testament. If you die without leaving a will, the court will appoint someone to this position. You can appoint one or more individuals or an institution, such as a bank or trust company.

 

 

She's charged with gathering your assets and settling your final debts and tax obligations from estate funds, then distributing the remainder of your estate to your beneficiaries or, if you don't have a will, to heirs set by state law. Her fiduciary responsibility is to your beneficiaries as well as to your expressed final wishes.

 

A Trustee or Successor Trustee

A trustee is responsible for managing assets that you've placed in a living trust. He must act in accordance with the directions you've included in the trust agreement, just as an executor must act in accordance with the terms of your will. This can be one or more individuals or an institution, such as a bank or trust company.

 

Many people act as their own trustees when they create revocable living trusts, appointing a successor trustee to take over later should they become incapacitated or at the time of their deaths. This is not an option with an irrevocable living trust. You must appoint someone else to act as a trustee from the beginning.

 

 

In either case, the trustee also has a fiduciary responsibility to your beneficiaries after your death. His role as fiduciary does not end when you pass. It shifts to those who will benefit from your estate, and he must put their interests first in conjunction with your final wishes. 

 

​

A HEALTH CARE AGENT OR SURROGATE

​

This fiduciary is responsible for making medical decisions on your behalf in accordance with directions you've set out in an advance medical directive, also sometimes called a medical power of attorney or a durable power of attorney for health care.

 

This fiduciary can't be an institution. He can't be a health care provider who is currently treating you. He's charged with upholding your written wishes regarding health care at a time when you're unable to speak them yourself. 

 

​

Unlike an executor or a trustee, an attorney's fiduciary obligation is to you, his client, not your beneficiaries. His role is to protect you and your estate and to ensure that your wishes are followed in indisputable documents that provide for them, such as your will.

 

AN ATTORNEY-IN-FACT

​

An attorney-in-fact, sometimes simply called your agent, is responsible for managing assets that are titled in your individual name. She acts in accordance with directions that you've included in a power of attorney. It can be one or more individuals and/or an institution, such as a bank or trust company.

 

A PRE-NEED GUARDIAN 

​

This individual is responsible for taking care of you and your property if the court determines that you're mentally incompetent and in need of someone else to manage your affairs. This would be the case if you did not have a revocable living trust so a successor trustee would step in for you. 

 

You can designate this fiduciary in a free-standing legal document called an advance medical directive or in a medical or financial power of attorney.

 

FiNANCIAL ADVISOR

​

Planning a particularly complex estate might require the advisory assistance of a financial firm, a bank, or even a brokerage firm. These fiduciaries are not limited to individuals. These types of business entities can also have fiduciary responsibilities that extend to all their employees, partners, corporate officers, and other personnel. 

 

Brokers themselves, however, are not usually held to the fiduciary highest standard of care. They follow another code, a "suitability standard" that is far more relaxed. Remember, a fiduciary must put her client's interests before her own.

 

This can be a tightrope for brokers so they're normally held to a standard that simply says they're obligated to research the advice they're giving you and they act in good faith to serve your best interests based on their knowledge of your financial situation. 

 

You might entrust your assets to the care of these individuals during your lifetime but and the bulk of fiduciary responsibility shifts to your executor or to your successor trustee at your death. 

 

ALTERNATE FIDUCIARIES 

It's important that you choose one or more alternate fiduciaries in case your first choice can't or doesn't want to serve, and you should always check with the person you're thinking of appointing so you have a clear understanding of her feelings on the matter.

 

A court will select someone else for you if any of your fiduciaries decide not to serve when they're needed and you're incapable of making the decision yourself at that time. 

 

​

​

​

​