Being an Estate Fiduciary is an Honor and a Responsibility
When the fiduciaries for an estate are chosen, most of those who have been chosen see it as a great honor, which it usually is. However, it's not just an honor; the job comes with a significant amount of legal responsibility. The position as a fiduciary for an estate is not just honorary, it's legal. And as is the case with any legal responsibility, there is also the potential for legal liability if you don't perform your tasks to the highest legal standards. Such legal liability could end up costing you dearly if you're not as careful as can be.
So, what is a fiduciary? There are often a number of them in an estate, and the term can refer to any of them, including an executor, an administrator, or even a trustee or guardian. If the decedent leaves a will, the estate is considered to be "testate," and the proceeding in that case is referred to as a "probate proceeding." The "executor" is the person who is named in the will to administer the estate.
If the decedent dies without a will, however, the estate is referred to as "intestate," and the proceeding is referred to as an “administration proceeding.” In those cases, the court will appoint an "estate administrator." That fiduciary is then expected to perform duties similar to those of an executor in a testate case.
Regardless of whether you're involved with a probate proceeding or an administrative proceeding, the fiduciary has a number of important duties to perform. They are expected to administer the decedent's estate promptly, efficiently and impartially, by gathering together and listing all of the estate assets fully and completely. They must then compile a complete list of the decedent's debts and obligations and pay them with whatever funds are available to the estate. The fiduciary also has a responsibility to notify persons who have a legal interest in the estate of any matters affecting those interests.
In addition to those responsibilities, the fiduciary must also collect and manage all of the estate assets, and make sure they are not mixed, or commingled, with any other assets or funds. The fiduciary must also keep careful records of every transaction.
A fiduciary will have to fill out and sign a great many forms, and that fiduciary is ultimately legally responsible for their contents. That could include the filing of necessary tax forms, including the decedent's final state and federal income tax returns, but they could also include a fiduciary income tax return or an estate tax return, depending on the circumstances. If the fiduciary fails to do everything that is expected of them, the fiduciary may be fined or jailed as a result.
Being named to a fiduciary position with a loved one's estate is definitely a great honor, but with that honor comes a lot of responsibility. Make sure you realize that and are willing and able to perform all of the tasks necessary to get this important position right.
