What IS a Fiduciary?

A fiduciary is someone who is placed in a position of trust, some examples are attorney in fact (under a power of attorney), trustees, conservators, guardians, executors, or attorneys representing clients.  When someone asks you to act as their power of attorney or executor of their will, you are taking on a fiduciary role, and the responsibility that goes along with it.

Relatives of Heiress Huguette Clark Accuse Lawyer and Accountant of ‘Plundering’ Her Fortune; “Attorney Suspended over Will Bequest, Loan”; Northampton Executor Jailed

These cases, a high profile national story, a local disciplinary action, and a British story, have lessons for clients and attorneys working in the estate planning area.  The first is that your actions may well be scrutinized by those who are not favorably inclined towards you, so if you have done nothing wrong, be sure that your record keeping is precise, up to date, and accurate.  If you are acting as a fiduciary (executor, power of attorney, guardian or conservator) keeping accurate records is a DUTY, not something that you can do or not do as the spirit moves you.  A fiduciary’s duties are taken seriously, and if you are not a good record keeper, decline to act as a fiduciary for someone else. 

The other lesson, and perhaps the more obvious one, is that you have an ethical and legal DUTY to act in the best interest of your client (or of the protected person or the heirs), regardless of whether or not it is in YOUR best interest.   Again, this is not optional; if your actions could be misconstrued as not being in the client’s best interest, be meticulous in documenting, bringing in third parties, and recording the set of circumstances that led to such an outcome.  If you are simply a family member trying to do the right thing, get some professional assistance so you don’t wind up in a contentious law suit – or worse.

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