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What fiduciary duty means for the representative of an estate

On Behalf of | Jan 30, 2024 | Estate Administration |

The personal representative of a Georgia estate has numerous responsibilities. They need to attend probate hearings and locate estate planning paperwork. They send notice to creditors, file tax returns and secure the assets that belonged to the decedent. Eventually, they may sell off certain assets and distribute others to the heirs or beneficiaries of the estate.

Those obligations can create a lot of extra work and stress for the person fulfilling someone’s final responsibilities and upholding their last wishes. Often, estate plans include some minor form of compensation for the personal representative of the estate. Offering payment for services rendered is one way to prevent violations of the fiduciary duty that comes with estate administration. Those managing an estate should do their best to uphold their fiduciary duty to the people who stand to inherit from the estate.

What does fiduciary duty mean?

A personal representative administering an estate usually has a fiduciary duty to others. In Georgia, a fiduciary duty is the highest legal level of responsibility that one party may have to another. A fiduciary duty makes it someone’s responsibility to act in the best interests of another party rather than in accordance with their own desires. The personal representative of an estate or the trustee administering a trust has a fiduciary duty to beneficiaries. They should put the best interests of beneficiaries ahead of their own needs or desires.

That duty typically means making smart investments and cautious decisions about estate management that help maximize what beneficiaries receive. Improper administration can diminish the value of the estate and negatively impact beneficiaries. Violations of fiduciary duty could occur due to negligence or willful misconduct.

Breaches of fiduciary duty may lead to litigation

One of the scenarios in which family members or beneficiaries may seek the removal of the personal representative of an estate for a trustee is when they believe that there has been a violation of fiduciary duties. Scenarios involving self-dealing or embezzlement, as well as incompetent resource management, might lead to claims of someone violating their fiduciary duty to an estate. Litigation can extend the timeline for estate administration and further decrease the overall value of an estate.

Understanding what obligations come with probate responsibilities may benefit those helping to administer an estate and those expecting to inherit from one.