Wills and Trusts are intended to carry out the intent of the person who created them. Unfortunately, disputes sometimes arise as to what the person intended or whether the Executor, Personal Representative or Trustee has carried out their duties correctly. This person serves as a “fiduciary” and the law imposes certain duties and requirements on them.
Obligations of a fiduciary include:
1) A Duty of Loyalty
A fiduciary cannot use their position to benefit themselves in a way that conflicts with the obligation to protect the interests of the other people entitled to benefit under a Will or Trust. In other words, a fiduciary has an obligation to demonstrate total loyalty to all the beneficiaries.
2) A Duty of Disclosure
A fiduciary has a duty to disclose all material facts to the beneficiaries of the trust or estate. This duty goes beyond the typical obligation to maintain accounts, and encompasses all information the trustee or personal representative becomes aware of in their fiduciary capacity.
3) A Duty of Reasonable Care
A fiduciary must exercise at least the degree of care that a reasonably prudent person would devote to his or her own affairs. In the case of certain complex matters, such as investments and taxes, this often includes the duty to seek and follow professional advice. Many disputes arise over differing views of what is reasonable or prudent.
People serving in a fiduciary capacity should carefully consider what is required of them by law and seek the advice of an attorney if appropriate. It is also a good idea to remain aware of brewing disagreements between beneficiaries and seek to resolve them early, before positions harden and battle lines are drawn.
To schedule a consultation about fiduciary duties or for counsel regarding a potential dispute, please contact us or call (405) 435-9700.