When we agree to serve as someone’s agent under a power of attorney, as the executor of their Will, as a trustee or a guardian, we are agreeing to act as a fiduciary. Sometimes we are not even sure how to pronounce the word, let alone know what it means.
Legal and ethical responsibilities of a fiduciary
Semper fi, Fido and fiduciary all denote the same thing: faithfulness. A fiduciary must always put the interests of the person he is serving first. A fiduciary must always make decisions based on what is in that person’s best interest.
If money is involved, a fiduciary must manage it carefully. No borrowing is allowed. So that all payments can be accounted for, cash should never be used: bank and credit card statements provide easy proof of how money was spent. A running account should be kept, answering any questions someone may have about the fiduciary’s honesty and loyalty to the person who appointed him.
If choices are to be made, a fiduciary must make the kind of choices the person would make, choices in that person’s best interest from that person’s point of view.
If you are appointed as executor or administrator of an estate, as a guardian or a trustee, the lawyer involved will guide you in fulfilling your duties.
If you are appointed as someone’s agent under a power of attorney, you might want to get a free copy of “Managing Someone Else’s Money: Help for Agents Under a Power of Attorney” from the Consumer Financial Protection Bureau. www.consumerfinance.gov.
Fido may be man’s best friend. As a fiduciary, you, too, are someone’s best friend. Keep that in mind and there should be no need to send in the marines.
Terry Garrett is a member of the National Academy of Elder Law Attorneys and is active in the Texas and Austin Bar Associations. She graduated with honors from Cornell University. She was on the Dean’s List at Wharton Business School. She earned her J.D. at Columbia Law School, receiving the Parker Award and a Mellon Fellowship.
She assists families of people with special needs, people planning for the retirement years and people administering estates.