Assigning financial decision-making powers to someone else is an important element in any comprehensive estate plan. These designations make it possible for a person to handle financial matters from paying your bills if you can no longer manage your own finances to tracking down your heirs to distribute property in the event of your death.
When you give someone the power and permission to manage your money and assets, you are placing on them an incredible responsibility. It is critical that they take this seriously. Unfortunately, there are some people who decide to abuse this power and commit a breach of fiduciary duty.
To back up a little, readers should understand that a fiduciary is the party who is acting on behalf or for the benefit of someone else. Someone in this role has an obligation, or duty, to perform his or her responsibilities in accordance with the best interests of the other person.
In the context of estate planning, breaching a fiduciary duty means that a person has not acted in the best interests of the testator, or the person who made a will. Some examples of this might include:
- Neglecting debts and bills
- Failing to file tax returns
- Using estate assets or funds for personal, unauthorized use
- Failing to distribute estate assets in a reasonable period of time
- Buying or selling property that does not benefit the testator
- Not having assets properly appraised
If you suspect that a loved one's assets are being mismanaged, neglected or abused by a fiduciary, it can be critical that you consult an attorney. This can be especially vital in situations where the other person is deceased and cannot act to protect himself or herself.