Chayet & Danzo, LLC

Call for a Free Initial Consultation

Direct 303-872-5980
Toll-Free 888-472-1088
Email Us

Compassion, talent and dedication:
guiding colorado families and Their Trusted Advisors During Times of Need

FAQ about fiduciary duties in Colorado

| Apr 18, 2017 | Executors & Fiduciaries |

Few people fully understand fiduciary duties in the context of trusts, estates, guardianships, conservatorships and similar matters. This is because they generally do not have to handle these duties on a daily basis.

As we discussed in our December blog post, a fiduciary is a person who acts on behalf of another person — often called the principal or agent. The associated legal duty requires acting in good faith and making decisions that benefit or are in the best interest of the other person within the scope of the type of special relationship that they have.

When must a fiduciary act or make decisions?

Specific fiduciary duties may involve matters of discretion. For example, a trustee who manages money on behalf of the beneficiary of the trust must make reasonable investment decisions.

Fiduciary duties also encompass specific legal responsibilities. For example, the personal representative of an estate must file certain reports with the court within specific time frames or a tax accountant must file his or her customer’s tax returns on or before their due dates.

What are some roles that come with a fiduciary duty?

Examples of fiduciaries include:

  • Trustees and personal representatives of estates (also called executors)
  • Guardians or conservators
  • Attorneys-in-fact or agents, who have received the power to manage the financial affairs of other people by personal appointment
  • Representative payees, who manage money from public benefits like social security for vulnerable recipients
  • Agents appointed by medical powers of attorney to make health care decisions for principals

Who can act as a fiduciary?

A person with fiduciary responsibilities is often a family member or friend of the principal. For example, a family friend may be asked to act as the personal representative of a person in his or her will or a close relative may ask the court to become a guardian for a beloved family member who has become incapacitated.

Friends and family who take on fiduciary relationships may not have professional training in fulfilling their responsibilities. It is not unusual for a fiduciary to hire a professional to help the fiduciary such as an accountant to help with financial reports or a lawyer to guide a personal representative through the complex steps needed to probate a will in court.

Sometimes a fiduciary will be a professional paid to perform fiduciary duties like a bank with a trust department that can act as a professional trustee or a law firm that may provide the service of acting as an appointed fiduciary.

Why is it important to seek legal advice?

Anyone acting as a fiduciary with questions about fiduciary duties or any person questioning whether a fiduciary is acting in good faith should speak with a lawyer about these matters.

At our law firm, we advise and represent many people with fiduciary duties. For example, a personal representative or trustee, whether family, friend or professional, may need legal guidance to understand and carry out his or her responsibilities or make decisions in the best interest of a principal. We also defend fiduciaries when other interested parties question fiduciary decisions such as by filing objections in court.

On the other side of the coin, we also represent people who allege that fiduciaries have not acted in the best interest of their principals.

Finally, we also provide the professional service of accepting appointment as a fiduciary and fulfilling those responsibilities.

Archives

Co-Counsel Services for
settling of Personal Injury and Divorce Cases

Read More

Important intake forms

Prepare for your Meeting

Our Elder Law & Estate Planning Blog

Read Weekly Updates

Join our mailing list

Sign up here

FindLaw Network