The Role of Attorneys for Property and Executors: A Fiduciary Must Always Account

Fiduciaries, whether acting as attorneys for property or executors of a will, hold a critical position of trust. Their legal and ethical duties demand transparency, accountability, and unwavering dedication to serving the best interests of those they represent. This blog post explores the responsibilities of these fiduciaries and emphasizes the importance of meticulous record-keeping.

Understanding the Role of Attorneys for Property

An attorney for property is entrusted with managing the assets and financial affairs of an incapable person. This role carries significant fiduciary obligations, including:

• Acting solely in the best interest of the principal.
• Avoiding conflicts of interest or self-dealing.
• Maintaining detailed records to account for all actions taken on behalf of the principal.

Accountability is not optional; it is a cornerstone of fiduciary duty. Upon the death of the principal, attorneys for property may be required to provide a full accounting to beneficiaries. This includes producing documents related to financial transactions, corporate interests, and other relevant matters. Courts have underscored that fiduciaries must be prepared to justify their decisions and actions transparently.

The Executor’s Fiduciary Duty

Executors of wills also bear significant fiduciary responsibilities. As administrators of a deceased person’s estate, they are tasked with:

• Managing and preserving estate assets.
• Paying debts and taxes owed by the estate.
• Distributing remaining assets to beneficiaries as directed by the will.

Executors must act in good faith, avoid favoritism among beneficiaries, and ensure that estate property is not mismanaged or diminished unnecessarily. Like attorneys for property, executors are required to maintain detailed records and provide clear accounts of their actions during probate proceedings.

Why Record-Keeping Matters

Both attorneys for property and executors must maintain comprehensive records throughout their tenure. These records serve multiple purposes:

1. Transparency: Beneficiaries have a right to understand how assets were managed.
2. Legal Protection: Proper documentation protects fiduciaries from allegations of mismanagement or breach of duty.
3. Efficiency: Detailed records streamline accounting processes and reduce costs in legal proceedings.

Failure to account adequately can lead to court intervention, removal from office, or even financial penalties.

Key Takeaways for Fiduciaries

1. Accountability Is Non-Negotiable: Whether managing assets as an attorney for property or administering an estate as an executor, fiduciaries must adhere strictly to their duties.
2. Record-Keeping Is Essential: Maintain clear, accurate, and accessible records throughout your tenure.
3. Seek Professional Assistance: Fiduciaries can often be indemnified for professional help needed to fulfill their duties effectively.
4. Understand Legal Obligations: Familiarize yourself with relevant laws governing your fiduciary role to avoid breaches.

Fiduciaries play a vital role in protecting vulnerable individuals and ensuring that estates are managed according to legal and ethical standards. By embracing accountability and maintaining thorough records, they uphold the trust placed in them while safeguarding themselves against potential disputes or liabilities.

If you need help in the area of account management for a family or friend and you are appointed as Executor or Attorney for Property, reach out to Peter for assistance and questions.

Read more: What is a Hotchpot Clause and Why is it Used in Wills?