A fiduciary duty is a legal obligation to act in the best interests of another person or entity. In the context of probate, a fiduciary duty refers to the obligation of the personal representative (also known as the executor or administrator) of an estate to act in the best interests of the estate and its beneficiaries.
Who Has A Fiduciary Duty in Probate?
The personal representative has a number of responsibilities in probate, including:
- Gathering and inventorying the assets of the estate
- Paying any debts or liabilities of the estate
- Filing the necessary tax returns and paying any taxes owed by the estate
- Distributing the assets of the estate to the beneficiaries in accordance with the terms of the will or state law
The personal representative has a fiduciary duty to carry out these responsibilities in a manner that is honest, fair, and in the best interests of the estate and its beneficiaries. This means that the personal representative must act with the highest level of care and diligence, and must not engage in any actions that would benefit themselves at the expense of the estate or its beneficiaries.
If the personal representative breaches their fiduciary duty, they may be held legally accountable and may be required to pay damages to the estate or its beneficiaries.
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Why Is Fiduciary Duty Important?
An obligation to act in the best interest of another party. For instance, a corporation’s board member has a fiduciary duty to the shareholders, a trustee has a fiduciary duty to the trust’s beneficiaries, and an attorney has a fiduciary duty to a client. A person or organization that manages property for a person, with a legal responsibility involving a high standard of care, e.g., conservators, guardians, personal representatives, agents, or trustees.
How Does a Breach Of Fiduciary Duty Occur?
When a principal fails to act responsibly in the best interests of a client, a breach of fiduciary duty occurs.
A breach of fiduciary responsibility has a number of repercussions. They can range from reputation damage to license revocation and financial penalties. The fiduciary duty binds the parties until the property (asset or debt) is distributed or divided in a judgment.
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