A fiduciary takes care of money or property for someone else. They must make decisions that benefit the person they help. While they must handle the most important responsibilities themselves, they can assign some tasks to others. However, they remain responsible for ensuring proper completion.
Tasks a fiduciary can delegate
Fiduciaries can assign simple tasks that do not need their personal judgment. For example, they can hire an accountant to file taxes or a financial advisor to help with investments. Lawyers can also assist with legal paperwork. By delegating these tasks, fiduciaries can focus on overseeing everything properly.
Tasks a fiduciary cannot delegate
Some duties require a fiduciary’s direct decision-making. They cannot allow someone else to decide how to invest money, distribute assets to beneficiaries, or resolve disputes. These essential duties require personal handling to ensure fairness and legality.
Risks of delegating the wrong tasks
Even after assigning a task, a fiduciary remains responsible for the outcome. If an accountant, lawyer, or financial expert makes a mistake, the fiduciary must correct it. Failing to review the work can lead to legal trouble. Selecting trustworthy professionals and monitoring their work helps avoid issues.
How to delegate the right way
A fiduciary should document all assigned tasks and set clear expectations. Regular communication with the people handling these tasks ensures proper completion. By staying involved, fiduciaries can manage their responsibilities while reducing the risk of mistakes.
Delegating helps a fiduciary handle responsibilities more efficiently, but they must do so carefully. Understanding what they can and cannot delegate allows them to perform their job well and protect the people they serve.