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The definition of a fiduciary and why it is important

Whether you are preparing to take on the duties of an estate executor or if you are the beneficiary of a Missouri estate, you should understand the concept of a fiduciary. In some cases, an executor is challenged in court for not fulfilling a “fiduciary” duty. Being a fiduciary entails certain responsibilities that, if not carried out, can invite litigation that could have the fiduciary removed from the position and possibly require the fiduciary to pay legal damages.

The Street explains that a fiduciary is a shortened term that means “fiduciary responsibility.” As applied to a person, being a fiduciary means that you have a duty to another person, sometimes called a client, a principal, or a beneficiary. In the case of an estate executor, a fiduciary has the responsibility to the decedent of the estate to carry out the decedent’s wishes and to the beneficiaries of the estate to manage their assets properly so that the beneficiaries can receive them as the decedent had wished.

Smart Asset defines a number of ways an executor can breach fiduciary duty. Sometimes an executor can make poor management decisions that cause some of the estate to lose value. For instance, an executor could invest estate assets with the goal of preserving them, but the investment decisions could be poor. Executors may also sell estate assets for amounts less than they are worth.

There are also executors that outright steal from estates. These offenses can include taking money from the estate and using it on personal expenditures or diverting estate money to a personal account or otherwise co-mingling with personal assets. Physical property can be stolen as well. In other cases, executors may waste or destroy estate assets.

When an executor breaches fiduciary duty, beneficiaries of the estate have recourse in Missouri courts to try to remove the malicious executor. Estate disputes can take many different forms, so it is helpful to consult an experienced estate attorney to understand your options if you suspect a relative’s estate is being mismanaged.