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What are the responsibilities of a fiduciary?

| Jun 1, 2021 | Blog, Estate Planning |

Residents of California may want to learn more about the role of the fiduciary and their responsibilities. Because fiduciary duty may be a requirement among certain professions, clients and professionals should know more about what this is.

The meaning of fiduciary

This is a person who manages money or property for someone else, working on their behalf. The law requires that a fiduciary manage the assets of the person to maximize benefits. They must not do this for their own benefit.

The person who gives priority to the benefit of others is the fiduciary, and the person receiving these benefits is the beneficiary or principal. Friends or family as well as business relationships may have fiduciary duties.

Responsibilities

Fiduciary duty is a term for what a person entrusted as fiduciary must do for their beneficiary. Two key duties include the following:

  • Duty of care – They must make informed business decisions after critical review of information. For example, a financial advisor might analyze information about a client’s financial life while making recommendations.
  • Duty of loyalty – They must put personal interest aside. The fiduciary must not have undisclosed personal or economic interests.

Lawyers may hold fiduciary duties as well as others in positions of trust. There is a wide range of professionals with fiduciary duties. The following are some examples of people who hold fiduciary positions:

  • Estate executors
  • Lawyers
  • Directors of corporations
  • Real estate agents

If you need help with estate planning or tax planning as well as other financial issues, it may be wise to consult an attorney with a knowledge of fiduciary issues. They may help you with wealth transfers and tax matters while protecting your financial interests.

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