When an individual passes, as part of managing the decedent’s estate, not only do all of that person’s assets have to be gathered together, but any outstanding debts, tax filings, and distributions of money or property have to be handled as well. The individual most often called upon to handle such affairs and uphold certain fiduciary duties is a personal representative or executor of the estate.

A fiduciary is someone that is responsible for ensuring that the execution of that individual’s will was handled in accordance with one’s stated wishes. Despite the responsibility of the fiduciary to act not in one’s own interest, but instead for the benefit of another, this does not always happen, resulting in a breach of fiduciary responsibility.

In order for a fiduciary’s actions to be in alignment with one’s responsibilities, it’s important to keep in mind that there is no standard plan of action to pursue in distributing assets. This is why, where trusts are concerned, it’s particularly prudent for an executor to rely on both a financial planner and attorney to help make sense of not only legal obligations, but about what investment choices comply with the best interest clause.

This is a particularly wise course of action to take given that the most common accusations lodged against executors center around a fiduciary not having exhibited sound judgment in making wise investment choices or having otherwise violated trust investment laws in place. As a way for the executor to cover his or her bases when handling trusts, having a well documented investment strategy along with expected goals is ideal.

Also, in working with individuals familiar with handling trust administration, it helps to ensure that you meet all necessary tax filing requirements required of trust fiduciaries. This includes ensuring that you file the necessary Schedule K-1 tax statement annually for each beneficiary that realizes income from the trust. An executor of an estate that fails to file this can be held personally accountable for paying both penalties and interest for failing to submit necessary tax paperwork in this case.

If you have been appointed as fiduciary of a trust or estate and need guidance as how to act in accordance with your role, a Melbourne, Florida, trust litigation attorney can advise you.

Source: Americanbar.org, “Guidelines for individual executors & trustees,” accessed April 17, 2017