Elder Law: What Is Fiduciary Duty

Fiduciary duty not only applies to investors and financial advisors, it is also an important part of elder law, elder estate planning, and elder asset protection planning too.

People most often hear the term “fiduciary” in relation to investors and their financial advisors. I wrote specifically about financial fiduciary advisors in a recent article. If you missed it, the link is at the end of this article. This month, I elaborate on fiduciary duty in many different kinds of relationships. These include relationships between: Trustee-Beneficiary; Corporate Office-Shareholder; Attorney – Client; and Real Estate Agent – Client. In fact, the fiduciary relationship is also implied in the marital relationship as well as in the employee-employer relationship.

A fiduciary duty involves actions taken in the best interests of another person or entity.

Fiduciary duties include duty of care, loyalty, good faith, confidentiality, prudence, and disclosure. For a financial advisor, this may mean recommending a product that results in reduced or no compensation because it’s the best option for the client. No matter in what way a fiduciary is representing a client, the idea is that fiduciary duty entails always acting on behalf of the client/beneficiary’s best interests.

When the area is complicated, as financial, legal, and real estate issues can be, it’s difficult to know if you are being guided in a way that benefits you, the client, above your representative. Certified Financial Planners (CFPs) have a Board which establishes Standards of Conduct about how CFP® professionals are expected to deliver their services in a fiduciary manner.

Attorney Fiduciary Duty

Attorney/client privilege is something we hear about frequently on TV shows and we understand it from the standpoint of privacy. In Estate Planning and Asset Protection, attorneys are bound by their fiduciary duty to responsibly manage the estate and safeguard its assets. The lawyer must at all times act in the best interest of the client and must make full disclosure of any economic or other interest that the lawyer has that might conflict with the interest of the client.

If An Estate Planning Attorney is retained to assist in the filing and administration of a Probate Matter, then the attorney’s Fiduciary Duties Include:

initiate probate proceedings.
notify potential heirs and creditors of the estate’s impending settlement.
inventory the deceased person’s holdings.
resolve any outstanding debts.
distribute inheritances.

How To Find A Fiduciary

Depending on what type of relationship you are looking to establish, a fiduciary will have different roles to play, but always with the objective of placing your best interest above their own. If you are looking for a fiduciary financial advisor, remember that they are not all created equally. Ask around. If you are interviewing financial advisors, ask if they are fiduciary before scheduling a meeting. Ask your friends and colleagues if they have a financial advisor with whom they work who is a fiduciary. Keep in mind that all fiduciary investment advisors and financial advisors are NOT created equally. It’s important to find someone who is experienced, and whom you feel has your very best interests at heart. You can also verify whether a financial advisor is a fiduciary at the SEC website, and you can search on the CFP® website for fiduciary planners in your area. If you work with an attorney you trust, you can ask if they have a recommendation. As asset protection attorneys we often work together with our clients’ financial advisors.

Best Practices For Standards of Conduct

When hiring any fiduciary, insist that they meet their industry’s best practices for standards of conduct. True fiduciary financial advisors will, among other things:

Be a fiduciary at all times, in all circumstances
Put agreements and disclosures in writing.
Show clients what they pay and if the firm receives fees from third parties for their recommendations.
Doggedly avoid conflicts of interest – or mitigate them.
Be fee-only; avoid commissions.
Have baseline knowledge, education, and competence.
Use an investment policy statement that, at a minimum, expresses assumptions about objectives, risk and performance.
Minimize investment expenses.

The Estate & Asset Protection Law Firm Takes Our Fiduciary Duty Seriously

Establishing an estate plan requires a very high level of trust between attorney and clients. We take our fiduciary duty seriously, providing the highest level of care and service. We would be happy to discuss working with you to create an estate and asset protection plan. Give my office a call at 404-370-0696 and let’s discuss your specific needs.

Link to article: Working With Professional Fiduciary Financial Advisors

Looking to find an experienced estate lawyer in the Georgia area who is skilled in asset protection and estate plan preparation? Shannon Pawley is an attorney in Georgia with expertise in estate planning and asset protection. Shannon can provide assistance with creating an estate plan to include making a will and how to establish a trust properly. If you have questions about asset protection or questions about making an estate plan, reach out to Shannon and she will be glad to help answer all the estate planning questions you might have!

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