Being given the role of estate executor can be considered an honor. It means the decedent trusted you to act in the best interests of their loved ones and their estate. However, it comes with significant financial responsibilities and fiduciary duties, which require you to serve the interests of the estate and its beneficiaries.
A failure, or even an unintentional error, could lead to breach of fiduciary duty claims against you. Let’s look at some things that can help prevent claims that you breached your fiduciary duties.
Understand fiduciary duty
As an executor, you have a legal obligation to act in the best interests of the estate and its beneficiaries. Examples include managing assets prudently, avoiding conflicts of interest and maintaining transparency in all actions.
Maintain accurate records
Keep detailed, accurate records of all transactions, decisions and communications you conduct. Proper documentation provides evidence of your diligence and adherence to your fiduciary duties.
Avoid conflicts of interest
Make certain your personal interests do not interfere with your duties as an executor. Avoid using estate assets for personal gain or favoring certain beneficiaries over others. Transparency and impartiality are paramount.
Communicate with beneficiaries
Regularly update beneficiaries about the status of the estate and any significant decisions you make. Open communication helps to prevent misunderstandings and demonstrates a commitment to your duties.
Adhere to court orders and deadlines
Follow all court orders and meet deadlines for filing necessary documents and reports. Failure to do so can result in legal consequences and invite claims of fiduciary duty breaches.
Another way to protect yourself against breach of fiduciary duty claims is to consult with an estate planning professional. This can be wise at any stage of the estate administration process and especially so if you encounter challenges or obstacles during your service.