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Taking a closer look at fiduciary representation

On Behalf of | Jul 3, 2021 | Fiduciary Representation |

When considering fiduciary representation for your estate, it is important to get a clear understanding of the term fiduciary. The term fiduciary often has different meanings for different people.

In the legal realm, however, the term takes on a more precise meaning.

The role of a fiduciary

According to Forbes, a fiduciary duty at its most basic level refers to a person, often in a professional capacity, who looks after your best financial interests. This means that the person appointed as your fiduciary has a legal obligation to make decisions that benefit you and your estate. This is important for many reasons.

For example, a fiduciary financial advisor cannot recommend financial instruments that serve the interests of the advisor over the client, also known as the beneficiary or the principal. When this happens, it can inflict harm on your financial future.

While fiduciary representation can fall to family members, it often is the province of professionals. Failure to fulfill obligations can lead to charges of a breach of fiduciary duty; if this happens, you might have legal recourse for damages.

The main duties of a fiduciary

A fiduciary has two main duties: a duty of care and a duty of loyalty. Duty of care means the fiduciary agent must make informed recommendations by analyzing your financial circumstances and suggesting appropriate products. Duty of loyalty means that the agent should not have any conflicts of interest and the agent should disclose any benefits they receive from a product.

Fiduciary representation involves many important factors and it is up to you to determine some of the responsibilities of your agent. For example, you might want your agent to read your will for his or her input.