A fiduciary is a person who assumes responsibility for a position of trust.
Fiduciaries serve by court appointment as guardians, conservators and personal representatives of estates. They also serve by agreement when engaged by a private family as trustees, representative payees.
In What Specific Roles do Fiduciaries Serve?
The Fiduciary as Trustee
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 (testamentary trust) or a document created during life (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 Guardian
The Fiduciary as Guardian is the person who is legally appointed to manage the Conservatee’s estate and/or person, including minors. Guardianship 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 guardian with responsibility for both the personal well-being and the financial interests of the ward is a general guardian. A person may also be appointed as a special guardian, having limited powers over the interests of the ward. A special guardian may, for example, be given the legal right to determine the disposition of the ward’s property without being given any authority over the ward’s person.
The Fiduciary as Conservator
A Conservator of the Person is appointed by the court to assume responsibility for decisions regarding the health and welfare of a person. A Conservator of the Estate is responsible for the prudent use and protection of the conservatee’s assets, including the inventorying, marshalling and managing all assets and benefits belonging to the Conservatee. The conservator collects income for the conservatee, pays obligations of the estate, applies for pensions, and organizes data for the preparation of income tax returns and other related duties. The Fiduciary can be conservator of a person or an estate.
How is the Conservatee Protected? 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.
The Fiduciary as Personal Representative
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.