A fiduciary is someone who holds a legal and ethical obligation to act in the best interest of another party. In estate planning, fiduciary roles include trustees, executors, agents under a power of attorney, and guardians.
The fiduciary standard is the highest duty recognized in law. It requires:
Loyalty: Putting the beneficiary's interests above your own.
Prudence: Managing assets with reasonable care and skill.
Impartiality: Balancing the interests of multiple beneficiaries fairly.
Transparency: Keeping accurate records and providing accountings.
Breach of fiduciary duty can result in personal liability, removal, and legal action. Choosing fiduciaries carefully — and providing clear guidance in your planning documents — is essential.
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