18 Fiduciaries

Question 1

Examples of Fiduciaries

Answer 1

• Executor or administrator
• Trustee
• Guardian

Question 2

Fiduciary Duties

Answer 2

1. Act in the best interests of the estate, trust beneficiary, or principal with whose welfare they are charged
2. Avoid conflicts of interest
3. Fiduciary who breaches fiduciary duties may be personally liable for damages

Question 3

Executor Responsibilities

Answer 3

Personal representative of an estate that is named specifically in a decedent’s will

1. Locates and proves will
2. Locates witnesses to will
3. Receives letters testamentary from court in which the court authorizes the executor to act for the estate

Question 4

Administrator Responsibilities

Answer 4

Personal representative of an estate appointed by a court, if the decedent died without a valid will (intestate) or failed to name an executor in his will

1. May petition court for his own appointment
2. Receives letters of administration in which the court authorizes the administrator to act for the estate
3. Posts required bond

Question 5

Personal Representative

Answer 5

Many states no longer make a distinction between an executor and an administrator, but merely refer to such person as the personal representative of the estate

Question 6

Duties of Executors and Administrators

Answer 6

1. Locate and assemble property
2. Safeguard, manage, and invest property
3. Advertise in newspapers
4. Locate and communicate with potential beneficiaries
5. Pay expenses of decedent
6. Pay debts and taxes (files tax returns, such as Forms 1040 and 1041)
7. Distribute assets to beneficiaries according to will or laws of intestacy

Question 7

Effect of Appointing Wront Executor or Trustee

Answer 7

1. Potential conflicts of interest
2. Proximity problems or family conflict
3. Named executor/trustee is incapable of administering estate efficiently and effectively
4. Being an executor is work—the person chosen should be capable and willing of performing