What Is A Fiduciary?

A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.

 

A fiduciary duty is the highest standard of care at either equity or law. A fiduciary is expected to be extremely loyal to the person to whom she owes the duty (the “principal”): she must not put her personal interests before the duty, and must not profit from her position as a fiduciary, unless the principal consents. The word itself comes originally from the Latin fides, meaning faith, and fiducia, trust.

In What Specific Roles do Fiduciaries Serve?


Fiduciaries serve by court appointment as guardians, conservators and personal representatives of estates. They also serve by agreement as trustees, representative payees, as agents under powers of attorney, or by Letters of Engagement if the individual has capacity.

1. The fiduciary as Trustee has the responsibility of carrying out the terms of the trust as set forth in a trust document. A trust can be created by the language found in a will or a document created during life. If the former, it is a testamentary trust; if the latter, it is a living trust. The Trustee is usually a person named by the creator of the trust in the trust document. In some cases, the Trustee cannot carry out his or her duties either because of incapacity or death. If there is no named Successor Trustee who can serve, the court has the responsibility of appointing a Trustee, usually someone who is nominated by the trust beneficiary(s).

Trustee duties can include funding the trust with appropriate assets, safeguarding assets, investing the trust assets according to the Prudent Investor Rule (as set forth in the Probate Code), reporting to beneficiaries (as set forth in the Probate Code) filing income tax returns for the trust and making distributions in accordance with the trust terms.The fiduciary as Conservator is the person who is legally appointed to manage the Conservatee’s estate and/or person. A Conservatorship is a legal tool to provide management for the financial and/or personal affairs of individuals deemed by the court to be physically or mentally incapacitated. A Conservatee is a person who is the subject of a conservatorship. A Conservator of the Person is appointed by the court to assume responsibility for decisions regarding the health and welfare of a person. A person is determined by the court to be incapacitated when he or she lacks sufficient understanding or “capacity” to make or communicate responsible decisions concerning his or her daily living needs. A Conservator of the Estate is responsible for the prudent use and protection of the conservatee’s assets. The conservator is responsible for inventorying, marshaling and managing all assets and benefits belonging to the Conservatee. The Conservator receives income, pays obligations of the estate, applies for pensions, and organizes data for the preparation of income tax returns and other related duties.

2. How is a Conservator Appointed? Anyone who believes a person may need help with daily living activities and/or finances can initiate the process to appoint a fiduciary as a Conservator. The concerned person may contact a fiduciary of choice to investigate the situation. If the fiduciary identifies sufficient need, he or she will retain an attorney to petition the probate court for appointment as Conservator.

3. How is the Conservatee Protected? The probate court often appoints an attorney to represent the alleged incapacitated person. A court investigator is also appointed by the court to determine the need for a Conservator and to recommend a suitable person to serve in that role. All issues and information are brought before a probate court judge who decides if the person is incapacitated or in need of protection and, accordingly, appoints a Conservator. The appointed fiduciary is accountable to the court for his or her work. The fiduciary must report to the court and receive the court’s approval in carrying out his or her responsibilities. The court requires the posting of a surety bond by the Conservator, which is intended to protect the assets of the Conservatee’s estate.

4. The fiduciary as Personal Representative is an individual appointed by the probate court to administer the estate of a person who has died, referred to as a “decedent.” A Personal Representative will either act as an Executor if named in the will, or as an Administrator if not named in the will, or if there is no will. The Personal Representative inventories and safeguards assets, collects income, verifies and pays obligations, identifies and notifies heirs and beneficiaries, and distributes assets.

5. The fiduciary as Representative Payee is a person designated by the Social Security Administration or other retirement plans to receive the income and pay the expenses of an incapacitated individual.

6. The fiduciary as Agent Under Power of Attorney. The responsibilities of a fiduciary acting as an Agent under Power of Attorney include the following: For health care, the fiduciary acts as attorney-in-fact to make health-care decisions, including placement, medical, treatment and final burial arrangements. More recently an Advance Health Care Directive provides this guidance. For financial matters, the fiduciary conducts personal and financial business pursuant to the client’s written instructions.  (See PFAC-pro.org)

 

When Do You Need a Care Professional?

  • The person you are caring for has limited or no family support.

  • Your family has just become involved with helping the individual and needs direction about available services.

  • The person you are caring for has multiple medical or psychological issues.

  • The person you are caring for is unable to live safely in his/her current environment.

  • Your family is either “burned out” or confused about care solutions.

  • Your family has a limited time and/or expertise in dealing with your loved ones’ chronic care needs.

  • Your family is at odds regarding care decisions.

  • The person you are caring for is not pleased with current care providers and requires advocacy.

  • The person you are caring for is confused about his/her own financial and/or legal situation.

  • Your family needs education and/or direction in dealing with behaviors associated with dementia.

What Are the Benefits of a Care Professional?

  • Personalized and compassionate service — focusing on the individual’s wants and needs.

  • Accessibility — care is typically available 24 hours a day, 7 days a week.

  • Continuity of care – communications are coordinated between family members, doctors and other professionals, and service providers.

  • Cost containment — inappropriate placements, duplication of services, and unnecessary hospitalizations are avoided.

  • Quality control – life care services follow Aging Life Care Association's (ALCA’s) Standards of Practice and Code of Ethics.

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