What is a fiduciary duty?

A fiduciary duty is a relationship of trust between two people where one person (the fiduciary) is expected to act in the best interest of the other (the beneficiary). This duty is legally binding, and it requires that the fiduciary adhere to a certain standard of conduct. In probate law, a fiduciary duty often applies to executors, guardians, or trustees. In Virginia, executors of a will are held to the highest standard of fiduciary duty and are required to act with the utmost good faith and loyalty. Executors are required to administer the estate fairly and in accordance with the law and the instructions in the will. They must also take reasonable steps to protect the estate from any threats of loss, and refrain from any self-dealing transactions designed to benefit themselves at the expense of the estate. Guardians must also act with a fiduciary duty and are obligated to provide the best possible care for the ward (beneficiary). This includes providing food, shelter, and medical care while protecting the ward’s physical, mental, and financial health. Guardians are also expected to manage the ward’s finances responsibly and in accordance with applicable state law. Trustees are also held to a fiduciary duty and are expected to manage the trust assets for the benefit of the beneficiaries. This requires the trustee to stay informed about the trust assets and make decisions that are consistent with the wishes of the settlor and beneficial to the beneficiaries. Trustees are required to invest trust assets with reasonable prudence and are obligated to avoid any conflicts of interest that might harm the beneficiaries.

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