A Fiduciary’s Duty
Each fiduciary has what is called a fiduciary duty: a legal obligation to represent the estate’s best interests. Fiduciaries may have different duties depending on their role and relation to the estate and its administration. An estate executor, for instance, must administer the estate’s assets in accordance with state rules and regulations. They have to:
- initiate probate proceedings
- notify potential heirs and creditors of the estate’s impending settlement
- inventory the deceased person’s holdings
- resolve any outstanding debts
- distribute inheritances
They are bound by their fiduciary duty to responsibly manage the estate and safeguard its assets.
Similarly, a trustee has a fiduciary duty to administer a trust in accordance with its conditions. They cannot use its assets to enrich themselves or withhold funds the trust says must be disbursed. Fiduciaries who breach their fiduciary duties can be challenged or sued in court.
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