The Importance of Fiduciary Representation

 

Fiduciary representation involves an agent, such as an attorney or accountant, who acts in a representative capacity on behalf of another person. This duty of care lasts for the duration of the relationship between the client and the agent. If the agent violates this duty of care, the client can seek damages for breach of fiduciary duty.

 

Fiduciaries are required to follow strict laws and procedures when managing assets. These laws require that fiduciaries keep accurate and reliable records of their activities. They must also avoid any conflicts of interest. For example, if the fiduciary receives a commission from a vendor or third party, it may be a conflict of interest.

 

Fiduciaries are not necessarily lawyers; instead, they are personal representatives of estates, conservators of conservatees, and trustees of trusts. The cross border estate planning attorney will perform their duties in a manner that is consistent with the law and in the best interests of the beneficiaries of the trust or estate.

 

Fiduciaries must take into account that their duty of care can extend beyond the transaction. For example, if the fiduciary makes an offer to purchase an investment that is outside the client's financial ability, they will violate their fiduciary duty. A fiduciary can also be held personally liable for causing harm to the financial interests of the beneficiaries of the trust or estate.

 

In addition to the basic duties of a fiduciary, attorneys, accountants, and other licensed professionals must be aware of and abide by the various laws and regulations that govern their conduct. Often, the law is not intuitive to those who are not knowledgeable in the field. However, experienced attorneys can help provide guidance. Moreover, they can advise on potential risks and how to avoid or resolve them.

 

Lawyers and other professionals who have been appointed as fiduciaries are subject to the highest legal obligations under California law. Fiduciary representation is particularly important because it can involve complex administrations. Law firms can also help fiduciaries in communicating with financial institutions and other third parties. Moreover, they can help prepare necessary court filings and reports for the beneficiaries of the estate or trust.

 

Fiduciaries often face lawsuits because of mismanagement of trusts and other estates. Disappointed beneficiaries may allege misconduct and ask for the return of their fees or the removal of their fiduciary. Other beneficiaries may be disappointed by the amount of assets the estate holds or by the distribution of the estate.

 

Litigation involving trusts begins in Circuit Court and Orphans' Court. Experienced attorneys can advise on the best way to deal with this type of dispute and advise fiduciaries on how to prevent or resolve a similar conflict in the future. Check out this page to learn more on the outside basis vs inside basis IRC analysis.

 

Many fiduciaries are able to obtain the services of an attorney for free. Nevertheless, they must disclose any possible conflicts of interest to their clients. Similarly, investment advisors are not allowed to buy mutual funds or other investments for their clients. Therefore, they must make it a point to use only accurate information in their investment decisions. You can get more enlightened on this topic by reading here: https://en.wikipedia.org/wiki/Property_law.