People who plan their estates often include a compensation for their trustee or executor. After all, that individual has all the responsibility for carrying out their last wishes.
You may have accepted this demanding role because you respect and care for the person who asked you. One of the most important things to understand about your position as executor or trustee is that it comes with a fiduciary duty to both the estate or trust and its beneficiaries.
What is fiduciary duty?
The law mandates varying degrees of responsibility that a person or business can have to another individual or organization. Fiduciary duty is the highest standard of obligation and responsibility possible.
For example, if your spouse is a real estate agent, letting them list real property from the estate could seem like a win-win situation. However, if other agents have a history of securing better purchase prices or faster turnaround times on transactions, the fact that you personally benefited from your decision and possibly negatively affected the estate or trust could lead to claims that you violated your fiduciary duty.
If you are an executor or trustee, you have a legal obligation to put the best interests of the estate or trust ahead of your own wishes. If people think that you put your own interests first, that could lead to probate litigation and attempts to remove you as the executor or trustee.
Understanding the responsibility you incur when you assume fiduciary duty as an executor or trustee can help you avoid making mistakes that could lead to expensive and lengthy probate litigation.
