business What are the Duties of a Fiduciary? April 30, 2019 When it comes to your estate plan, fiduciaries can serve in a number of roles both before and after your death. What are the common duties of a fiduciary and how do you decide who should fill this role? Looking to hire a fiduciary financial advisor for your estate planning needs? A fiduciary stands in a position of trust with you (or your estate after your death) and your beneficiaries. So, what exactly does a fiduciary’s role entail? We explore below.What is a fiduciary? A fiduciary is any person or institution who has the authority to act (and is legally obligated to act) on behalf of another in situations that require the utmost trust, honesty and loyalty. When it comes to estate planning, fiduciaries are hired to act in your best interests and manage and protect your financial wellbeing, both before and after death.Fiduciary vs. Suitability Most investors are not aware that there are two standards of care in the financial services industry: the fiduciary standard and the suitability standard. Check out our blog, Choosing a Financial Advisor: Suitability vs. Fiduciary Standards. Essentially, the fiduciary standard requires that an advisor place the client’s interest first whereas the suitability standard requires that an advisor make recommendations that are suitable based on a client’s specific situation.Common duties of a fiduciary Estate executor- The fiduciary is ultimately responsible for settling your estate in accordance with the directions included in your last will and testament. In the event that you die without a will and testament, the court will appoint someone to this position. Trustee- The fiduciary manages assets you’ve placed in a living trust and acts in accordance with the directions you’ve included in the trust agreement. A guardian for minor or disabled children- In the event that you pass away or become incapacitated, you’ll need someone to take care of your minor or disabled children. Medical power of attorney- The fiduciary makes medical decisions on your behalf (in accordance with directions that you’ve set out in a medical power of attorney) Who should I appoint as my fiduciary? As you can see, there are many highly personal decisions in the hands of the fiduciary you hire. While appointing a spouse, child, sibling or good friend may be your first inclination, this is not always the right choice. The amount of time and effort involved with serving as personal representative of an estate can be very significant and at times overwhelming, and often family members will accept the duty and later realize that the work involved is much more than anticipated. Can you have more than one fiduciary? Yes—you can appoint one fiduciary to handle your medical decisions, for example, and one to settle your estate. One person might not be the right choice for all fiduciary roles.Consider the following questions when deciding who should be your fiduciary(ies) Does this person have the time, skill and expertise to manage my financial affairs? Will this person be put into a difficult position when it comes to family dynamics? Will this person be able to make difficult decisions when it comes to my beneficiaries making demands for distributions? Will this person raise my children with the same values I would? Should I consider appointing a corporate or professional fiduciary (bank, trust company, law firm) to manage my financial affairs? When selecting a fiduciary take nothing for granted. It is crucial to verify that your fiduciary advisor has your very best interests in mind, and will be able to handle your affairs when you’re no longer able to. Questions on choosing the right fiduciary? Contact KLR Wealth Management, LLC.