Serving as a Personal Representative (also known as an Executor) or a Trustee is both an honor and a serious responsibility. When you step into one of these roles, you take on fiduciary duties, which are legal obligations to act in the best interests of the estate or trust and its beneficiaries. Understanding these duties is critical to ensure compliance with the law and to avoid potential liability.
Fiduciaries are held to a high standard which requires them to act in the best interests of the beneficiaries of the estate or trust they are administering. They must manage the estate or trust prudently by safeguarding assets, paying debts and taxes, and distributing property as specified in the appropriate documents or as required by state law. To manage appropriately, they will also need to keep detailed records and provide accurate inventories and accountings to the court and beneficiaries while keeping the assets separate from their personal assets.
Common mistakes include commingling personal and estate or trust assets, failing to communicate with beneficiaries, or delaying distributions. The fiduciary is never personally responsible for the debts or expenses of the person whose estate or trust they are administering, but can become liable if their fiduciary duties are breached. Courts may remove a fiduciary or order them to repay losses to the estate or trust. To avoid these issues, fiduciaries should keep meticulous records, seek professional guidance when needed, and communicate openly and regularly with beneficiaries.
Fulfilling the fiduciary duties of a Personal Representative or Trustee is a significant responsibility, but with diligence and appropriate guidance, you can protect yourself and honor the wishes of your loved one. When in doubt, you can contact our office for assistance with the administration of an estate or trust.
Our Initial Estate Planning Consultation is designed to give you the opportunity to find out about our firm, our approach to estate planning, and to help you decide if our services fit your needs and objectives. It is also designed to give you all of the information you need in order to determine what planning is right for you and your family.