Duties for Executors and Administrators.

A prior article provided information on some of the general duties and obligations of a fiduciary. In additional, there will also be specific fiduciary duties related to specific fiduciary positions. For example, a personal representative of a decedent’s estate, will or may be responsible for the following, among others, depending on circumstances:

• Identifying and taking possession and control of estate asset

• Identifying and paying enforceable debts and creditor claims of the estate from estate assets

• Determining and paying income, property and estate taxes (if applicable)

• Properly identifying and locating beneficiaries or heirs at law of the estate

• Making proper distributions to beneficiaries or heirs

• Properly resolving an ambiguous provision under a will by settlement or court order

• Investing assets during the administration of the estate

• Making the proper filings with the Court and the Commissioner

• Court or Commissioner proceedings and hearings related to creditor claims and other matters

Properly Performing Duties.

Failure to properly identify, perform, and resolve these and perhaps other issues and settle the estate can potentially result in liability for a fiduciary. Although the list above focuses on duties and obligations of a decedent’s estate, many of these duties and obligations are or may be applicable to other fiduciary positions. 

Good Intentions.

Most people fiduciaries are lay persons, often family members, who were named under a relative’s will or trust, and/or appointed by the court to serve as a conservator for of an incapacitated adult or guardian for a minor. They serve as fiduciaries because they were asked to do so. For many such fiduciaries the process of administering and estate can be daunting when also dealing with work, family and other life activities.

Fiduciaries should be open to engaging professional assistance when they are acting as a fiduciary. Here are some of the reasons why:

• Errors or failure to properly perform fiduciary duties can lead to personal liability in some instances.
  
  
• Reasonable fees and costs for obtaining legal advice, tax advice, tax preparation assistance, banking and investment advice, and other forms of assistance, with limited exception, may be paid as administrative expenses from of estate funds and not be paid by the fiduciary personally, although is expected to perform the services that do not require such expertise. 
  
  
• Under Virginia Code Section 64.2-105, a fiduciary using reasonable care in selecting a professional to assist them will not be held personally liability on an issue where they relied upon the advice of such advisor, thus affording a protection for the fiduciary who obtains such advice.

• Having professional advisors that the fiduciary can rely upon for advice as certain issues or questions arise, often provides a great deal of stress relief for the fiduciary and likely will also facilitate conclusion of the estate administration.
  
  
• Obtaining assistance as with most issues is subject to reasonableness. A fiduciary is expected to perform normal duties that are within the ability and knowledge of the fiduciary. For example, if a fiduciary hires others to perform duties and tasks that the fiduciary is fully capable of performing themself, the commissioner may under fiduciary compensation guidelines reduce the fiduciary’s compensation under such circumstances.