by Robin Tidwell

Created on: November 28, 2008   Last Updated: December 30, 2008

The term "fiduciary obligations" is most often used in legal jargon as a phrase which simply means "financial duties". Both attorneys and trustees involved in estate planning must be cognizant of and capable of attending to the fiduciary obligations, or the financial tasks, of creating and administering trust documents.

When drafting such documents, the attorney has a responsibility to assist the client and ensure that, according to the terms of the trust, his wishes are carried out and that all properties and assets are accurately accounted for.

An attorney may be guilty of ethical violations or even malpractice if this is not done. Unfortunately, this is often not known until after the death of the principle when his family begins to question both the motives and the bequests. At that time, however, there is little that can be done as "breaking" a trust or even contesting a will is difficult, costly, and time-consuming. Furthermore, due to court backlog, even probate court overload, often any abuse is not discovered until long after the trust is executed.

A gross violation would, of course, be one in which the attorney profits from the execution of a trust document; because this is relatively easy to surmise and to prevent, it rarely happens.

Ethics violations can be difficult to prove, and malpractice suits can be difficult to win. Attorneys' code of ethics are fluid, vague, and open to interpretation; it will be difficult to find representation to bring charges against an attorney or to even be able to discuss the potential merits of a case.

It is strongly suggested that, after a trust is drafted, the client obtain a second opinion from another attorney. This can certainly alleviate or perhaps even avoid undue stress for the principle, but can also help ascertain that beneficiaries will be well-protected as per the principle's instructions.

Typically a trustee will pay debts, disburse bequests, administer the assets of the trust, and generally be responsible for carrying out the wishes of the deceased. A trustee must be one in whom the principle can have confidence and who is financially savvy and responsible. Often, within the execution of a living trust, the principle himself is the trustee; these duties pass along to a successor trustee at the time of death. Usually two or more successor trustees are appointed, in case of unavailability, unsuitability, or death.

It is recommended that executors and trustees are not direct beneficiaries. Often these individuals

• 1
• 2
• Next Page >>