Fiduciary

A fiduciary is a person or entity with the legal and ethical obligation to act in the best interest of a beneficiary or principal while managing their assets, finances, or affairs. The fiduciary is expected to prioritize the beneficiary’s interests above their own. 

Types of fiduciaries

There are four common types of fiduciaries: 

• Trustees: Individuals or institutions appointed to manage assets held in a trust for one or more beneficiaries. Trustees are required to administer the trust according to the terms of the trust document.
• Executors: Individuals or institutions named in a will and recognized by a court to administer a deceased person’s estate. This includes distributing assets, settling debts, and carrying out the terms of the person’s will.
• Agents under power of attorney: Powers of attorney grant individuals the authority to make financial or healthcare decisions on behalf of another person, known as the principal. Many estate plans include durable powers of attorney and healthcare powers of attorney so the named agent can act on behalf of the principal if the principal becomes incapacitated. 
• Guardians: Individuals appointed by a court to make personal and/or financial decisions on behalf of a minor child or incapacitated adult.