Fiduciary Duties of Estate Representatives

If you have been appointed as an executor or an administrator of an estate, in the eyes of the law you are what is called a fiduciary. A fiduciary is an individual whom another has placed a great deal of trust and confidence in to manage and protect assets or property, or both.

Essentially, whenever one person places trust and confidence in another person with that second person's knowledge, a fiduciary relationship may have been created.

Estate Representatives Act on the Heirs' Behalf

Once a person accepts the duties of being an estate representative, the probate court imposes the fiduciary duties on that person. When the executor or administrator is appointed, the estate representative assumes a fiduciary relationship with the heirs of the estate.

The estate representative has the duty to act fairly and responsibly, and to act for the benefit of the estate, the heirs, and the creditors of the estate.

Breach of Fiduciary Duty

There are many ways that an estate representative may breach their fiduciary duties, however, the most common breaches, include:

• Self-dealing
• Comingling the estate's funds with personal funds
• Misappropriation of funds
• Failure to property diversify investments
• Improper reliance on professionals
• The failure to act in the heir's best interests
• Providing inaccurate information
• Failure to disclose
• Conflicts of interest
• Lying about financial affairs
• Favoring one beneficiary over another

The duty of being an estate representative does not come easily to most people. Unfortunately, even the most well-meaning executor, through ignorance of the law, can make mistakes. When a mistake causes harm to the estate and is considered a "breach of fiduciary duty," the estate representative or the trustee can be held financially accountable for any such acts.

Although it is conceivable why estate representatives could violate their duties rather easily, it is not unheard of for an executor or trustee to be wrongfully accused. If successful, a wrongfully accused estate representative may be able to recoup expenses and attorney's fees.