THE ROLE OF A FIDUCIARY
A Fiduciary is a person who assumes responsibility for a position of trust. Fiduciaries serve as a Trustee, conservator, guardian, executor, or personal representative of estates named in an individual's estate planning documents. They are also often appointed to these same positions by the probate court.
Typical responsibilities include:
Prudent management of the trust or estate assets
Determination of investment objectives and proper asset allocation
Development and maintenance of the accounting records of all transactions performed in the capacity as a Trustee or Executor
Administration of a will
Determination of distribution requirements
Verification and payment of obligations and invoices
Ensuring that all proper tax returns are filed
The trust document controls the role of the Trustee and needs to be reviewed with the Trustor/Grantor for a total understanding of intentions. A clear understanding must be attained for general dispositive provisions, powers of appointment, distribution plan instructions, disclaimers, estate taxes, allocation of principal and income, generation-skipping transfers, income tax issues, disqualified persons, asset schedules, and any ambiguities or drafting errors.
It is also the fiduciary's responsibility to identify to the Trustor/Grantor the normal and accepted business practices that can create actual or apparent conflict of interests within the context of fiduciary responsibility.
Disclaimer: Paul J. Bednarski is not a qualified legal, tax, or estate-planning expert. Information on this website should not be used or considered as a "guidebook" for trust or estate administration. This information should not be considered as all-encompassing and comprehensive in nature. Individuals should contact their own CPA or attorney for a further explanation of their fiduciary obligations and duties in any of the above capacities before accepting the responsibilities and liabilities of a fiduciary.