The Do's and Don'ts for Fiduciaries

As a court-appointed fiduciary, you are responsible for the proper care and management of someone else's property. The court has entrusted you with the powers of a Fiduciary, which comes with specific duties and responsibilities set by state law. The following are general guidelines and should not be construed as legal advice. Please consult with an attorney about fiduciary matters.

The following DO's and DON'Ts are basic rules that you should follow to properly fulfill your fiduciary duty and avoid any potential bond claims.

Best Practices for a Fiduciary

1. Utilize a Checking Account: Ensure all disbursements are made through a checking account. The checking account must be established with a court-approved bank or financial institution and registered under the name of the estate or guardianship. Canceled checks and bank statements serve as the most reliable records of your expenditures from the trust.
   
2. Maintain Accurate Records: Keep detailed records of all receipts and disbursements. Utilize one of the available web applications designed for tracking probate-related expenses and revenues. 
   
3. Consult Your Attorney: Always seek guidance from your attorney. Their expertise is invaluable and is what you are paying for. If you do not have an attorney, ensure that you properly research your role and responsibilities as a fiduciary.
   
4. Prudent Investment and Management: Manage the estate’s assets with the care, skill, and caution of a prudent fiduciary, under the court’s directions or approvals. It is advisable to consult with professionals such as a Certified Public Accountant (CPA) or Certified Financial Planner (CFP), especially for larger estates.
   
5. Timely Payment of Bond Premiums: Ensure that bond premiums are paid promptly when due.
   
6. Follow all Court Orders: To prevent mismanagement of the estate, it is crucial to adhere to all court orders and ensure timely filing of accounting inventories

By adhering to these guidelines, you can effectively manage the estate and fulfill your fiduciary responsibilities with professionalism and diligence.

Missteps in Fiduciary Duties

1. Do not treat the property as your own: Even if you are an heir or relative, do not treat the estate property as your own until the Court and the law officially transfer ownership to you. Keep the estate’s property separate from your personal assets. Failing to do so could result in criminal charges.
   
2. Avoid major expenditures: Do not spend significant amounts of the estate’s funds without obtaining written approval from the Court. This ensures that all major financial decisions are legally sanctioned.
   
3. Do not delay in reporting to the Court: Avoid delays in reporting to the Court. Follow your attorney’s instructions meticulously when signing and filing documents with the Court to ensure compliance with legal requirements.

By adhering to these guidelines, you can effectively manage the estate property and fulfill your fiduciary duties with integrity and professionalism. If you have any questions or need further assistance, consulting with your attorney is always a prudent step.

Bond Responsibilities

As a fiduciary, the court may require you to obtain a bond. Being the principal of the bond entails additional responsibilities. It is crucial to keep your bond renewed and compliant with the court’s requirements. 

• 1. The bond remains in effect and must be renewed until a final discharge is issued by the court and delivered to the surety.
• 2. The first year's premium is fully earned.
• 3. The court must order all increases and decreases to the bond amount.
• 4. The bond premium (including renewals) is a legitimate expense to the estate/guardianship for which you are personally responsible for paying each year when due!

Being a court-appointed fiduciary is a significant responsibility, involving the management of someone else’s property. This role demands meticulous attention to detail and a thorough understanding of state laws regarding fiduciary duties. While the guidelines provided are general, each case is unique, and it is essential to seek sound legal advice from an attorney during your tenure as a fiduciary.

If you have been appointed as a fiduciary and require a bond, we can help. Our expertise in fiduciary bonds allows us to expedite the bonding process, making it easy and efficient for you to obtain the necessary bonds. Click below to get your bond today. If you have any questions, please call us at (855) 470-0877 to speak with one of our probate bond experts.

The information provided on this blog is for general informational purposes only. It is not intended to be legal advice and should not be construed as such. Consult with a qualified legal professional if you are seeking assistance with a probate or estate matter.