Fiduciary

What is a Fiduciary Duty with Regard to Trusts and Estate Planning?

Published on: February 8, 2023 | By David W. Miller

There are many terms in the field of estate planning that have become ubiquitous in the field, however, their meaning is often misunderstood. Trustee, beneficiary, executor, and fiduciary are some of these terms. The personal term “fiduciary” comes from the type of duty that a fiduciary owes to a beneficiary in a trust or financial management decision. This “fiduciary duty” is generally based upon a relationship or contract between a beneficiary and a fiduciary, or trustee.

The fiduciary duty is built upon a contractual relationship whereupon the fiduciary agrees to accept responsibility for the duty to manage the beneficiaries assets in the best interest of the beneficiary. An example of a fiduciary in the field of estate planning is the relationship between the trustee and the beneficiaries of a trust. A trustee is a person or entity (often a bank or law practice) that takes legal ownership of the trust assets and manages them in a way to benefit the beneficiaries and honors the trust. This management may include investing money, purchasing or selling assets, paying taxes, and managing legal or financial issues and disputes.

Fiduciary duties related to trusts and estate planning may involve specific obligations. The fiduciary has a duty of care to diligently inform themselves of the details of the trust assets in order to exercise sound judgment to protect the interests of the beneficiaries. Furthermore, fiduciaries owe beneficiaries a duty of loyalty, which includes removing themselves from decision-making that could pose a conflict of interest. Another duty of a fiduciary is to act legally and in good faith. A fiduciary should not break the law or behave unethically when handling the beneficiaries’ assets, especially if such dealings collaterally benefit the fiduciary. Finally, a fiduciary owes beneficiaries a duty of confidentiality. The fiduciary should not release the identity or any information about beneficiaries without a mandate or good cause.

Picking a Power of Attorney and Keeping the Peace

Published on: October 14, 2019 | By McCulloch & Miller, PLLC

In many families, it’s easier to figure out the ‘who gets what’ part of an estate plan than it is to decide which person should be power of attorney. Which adult child can handle finances, which one is better with decisions during a crisis?

Making the decision about which family member will take on the responsibility of power of attorney may be a little easier, if you have a clear understanding of what the role entails. Your estate planning attorney has seen every possible family dynamic and will be able to help you work through this decision.

Considerable’s recent article, “How to assign power of attorney without sparking a family feud,” gives us some idea how the power of attorney can work within a family and among siblings.

How Does a Corporate Trustee Differ From a Family Member?

Published on: October 23, 2018 | By McCulloch & Miller, PLLC

Most of us consider naming a friend or relative with a background in finance or law to be a trustee for our family, but there is an alternative that is important to consider.

A corporate trustee will have a very different approach to managing a trust, and depending on your situation, may be a far better choice than a family member or friend. They’ll bring sound investment management skills and knowledge, minus the distractions of emotions.

The Dallas Business Journal’s recent article, “Fiduciary investment management and corporate trustees,” explains that one of the many benefits of appointing a corporate trustee, is that they are held to a fiduciary standard of care when managing a trust investment portfolio. That means that they’re legally required to place their client’s interests above their own when making investment decisions. While this may seem like a no-brainer, it’s not the rule for all financial professionals.