A fiduciary can be a person or entity that has the authority to act on behalf of another person in situations that demand trust, honesty and loyalty. But more than that, fiduciaries are legally obligated to act in the best interests of the people they represent.
It’s against the law for fiduciaries to betray their duty to act in your best interest. Lawyers can be disbarred while executors of estates can be held civilly and financial responsible if they violate that trust.
What do fiduciaries do?
Fiduciaries must put their own interests aside when representing you and can fill many different roles, such as:
- Executor of an estate: This type of fiduciary is responsible for carrying out your wishes according to your last will and testament. If you die without drafting a will, a court will appoint someone to manage your estate.
- Trustee: This individual is duty-bound to manage assets you place in a living trust. They must act according to the directions you left in the trust agreement, just as an executor would follow the instructions in your will.
- Guardian: Usually named as part of an estate plan, parents select their partner, or a trusted family member or friend in case they both die, to care for their children while the kids are still underage.
- Health care agent: You select this fiduciary to make health care decisions for you, usually as outlined in an advance medical directive. This is also known as a durable power of attorney or medical power of attorney.
- Attorney: Your lawyer is a fiduciary, regardless of what areas of the law they are licensed to practice. Their responsibilities and code of ethics are some of the most stringent as determined by the U.S. Supreme Court.
Protect your fiduciary rights
Regardless of whether you are a beneficiary in a trust or will or are designated to manage someone else’s affairs, it is vital that you understand the role a fiduciary performs. An experienced California attorney, who is knowledgeable about fiduciary duties and obligations as well as the rights of beneficiaries, will protect your interests if any dispute arises.