Natural disasters, accidents, and other emergencies can disrupt plans and create chaos. For those with fiduciary duties, such as trustees or executors, a crisis brings unique challenges. Understanding how to handle sudden issues can protect you and the people who depend on your decisions.
The role of fiduciaries in emergencies
Fiduciary duties require acting in the best interest of others, often involving financial or legal responsibilities. Therefore, loyalty, care, and accountability are vital qualities. In emergencies, these duties remain the same, but the steps you take may look different.
If an emergency threatens a beneficiary’s well-being or finances, keep the following steps in mind:
- Assess the situation immediately. Gather all the necessary information about the emergency. This may include reviewing financial records or confirming the safety of any physical assets.
- Take necessary actions quickly. If the emergency threatens a beneficiary’s well-being or financial stability, act without delay. For example, if a property under your care faces damage, try to promptly arrange for repairs to prevent further loss.
- Document everything. Keep detailed notes about what happened and the steps you took, including dates, times, and explanations for your decisions. This can protect you if questions arise later.
- Communicate with beneficiaries. Let the people affected know what actions you’ve taken. Share any updates on the situation and be available to answer questions.
- Review and plan for the future. After the situation is under control, evaluate what happened and update your plans. Consider creating or revising emergency procedures.
Remember that staying transparent with the people involved builds trust and reduces misunderstandings during stressful times.
The benefits of a backup
Having a backup or “successor fiduciary” can ensure the smooth administration of an estate, especially during unforeseen circumstances. This backup can step in if you become unable to perform your duties, preventing delays and potential legal complications.
It is important to choose a successor who is reliable, trustworthy, and familiar with the estate’s complexities. If the responsible parties do not arrange for a successor, the state may have to appoint one when necessary.
Emergencies test how well fiduciaries can uphold their duties. By acting responsibly and staying prepared, you can protect the interests of those relying on you during unexpected challenges.