fiduciary duty book and gavel on deskA fiduciary is an individual or entity responsible for managing money or property for another person. They are required to act in the best interest of the beneficiaries. Executors, trustees, administrators, and personal representatives are all fiduciaries.

Whether you are planning your estate and need to name a representative or you have been named a fiduciary by a friend or relative, it is essential that you understand what the role entails and what's expected of you.

Acting as a fiduciary involves overseeing an array of complex legal and financial issues that come with handling someone else's assets. The job can be time-consuming and emotionally challenging, and not everyone is up to the task. Here's what you should know about Virginia trust and estate administration and why you should consider taking advantage of professional fiduciary services.

Duties and Responsibilities of a Trustee or Executor

Serving as a trustee or estate executor can be complicated, overwhelming, and requires a significant commitment of both time and effort. The following is an overview of the wide-ranging tasks these types of fiduciaries may be expected to complete:

  • Qualify as an executor or trustee
  • File the will in probate court
  • Identify which assets must be probated
  • Notify banks, financial institutions, and applicable government agencies of a loved one's death
  • Gather all trust or estate assets and income
  • Obtain valuations on business interests, real estate, and all other assets and property
  • Notify trust and estate beneficiaries
  • Figure out who is named as a beneficiary on each of the deceased's retirement accounts
  • File annual income tax returns
  • Pay ongoing estate or trust administration costs
  • Liquidate assets as needed to settle debts and make distributions
  • Settle disputes
  • Invest trust assets safely and prudently, acting in the best interest of the beneficiaries
  • Distribute assets and inheritances to beneficiaries
  • Prepare and file final income and estate tax returns
  • Close the estate

If being a fiduciary for a trust or estate sounds difficult, that's because it is. While lengthy, the above list of duties doesn't even begin to scratch the surface of what fiduciaries must do.

Benefits of Professional Fiduciary Services

A professional fiduciary can:

  • Gather necessary documents
  • Complete required paperwork
  • Manage and meet important deadlines
  • Coordinate with the family's geriatric care manager, accountant, financial planner, and other professionals
  • Prepare court inventories and accountings
  • Marshal assets and pay taxes and debts
  • Resolve disputes between beneficiaries

Qualifying as an Estate Executor in Virginia

When creating a last will or testament, testators can name any trusted adult to serve as estate executor. The court usually approves the appointment of the named individual, provided that their selection wasn't the result of undue influence and there are no conflicts of interest.

To qualify, the prospective executor must contact the clerk's office in the county where the decedent resided and meet with the clerk (or deputy clerk) in charge of handling probate matters. During the meeting, the clerk will review a wide range of documentation, such as:

  • The deceased's original last will and testament
  • A certified copy of the death certificate
  • Completed Probate Information and Probate Tax Return forms
  • List of the decedent's heirs

In some cases, the executor may be required to pay a surety bond that equals the full value of the deceased's estate. However, wills often specifically waive this requirement.

Why Family Members or Close Friends May Be Unsuitable

Asking a close friend or family member to serve as a trustee or estate executor is no small favor. Many of the duties and responsibilities outlined above require completing multiple complicated and time-consuming steps. There's also an extensive amount of paperwork and numerous can't-miss deadlines to keep track of, which can make it a difficult, stressful, and overwhelming role for even the most well-intentioned individuals.

A hard and fast rule in selecting a fiduciary is that the named person should be someone you know well. However, in some cases, choosing someone close to you to serve as fiduciary for your estate or trust might not be best or could even be actively problematic. For example, friends and family may be unsuitable fiduciaries due to:

  • Immaturity
  • Financial irresponsibility
  • Other family or career obligations
  • History of substance abuse or certain mental illnesses
  • Poor health
  • Criminal records
  • Distance (out-of-state or international executors must select an agent who resides in Virginia to handle the process)

Additionally, naming a friend or family member as trustee or estate executor can create conflict among relatives that could be avoided by choosing an impartial professional. It's also important not to underestimate the emotional impact that your loss could have on those closest to you. It may be difficult for them to diligently fulfill the demanding role of fiduciary while processing their grief.

Why Choose Us

Cucinelli Geiger's trusted Virginia trust and estate administration attorneys have helped countless clients navigate these complicated and unfamiliar legal processes. If you're ready to name a fiduciary or have been named a fiduciary for a friend or relative's estate or trust, we may be able to do the same for you.

Our in-depth knowledge of the laws and legal process, as well as our many years of experience, allow us to adeptly handle a wide range of fiduciary services. We are discrete, conscientious, and insightful professionals committed to being here when you need us, taking on as much—or as little—of the burden as you wish. We can offer advice on how to complete the administration process or handle it for you from A to Z so that you can focus on your family. Ready to talk to us about your legal needs and find out how we can assist you? Take action now. Contact us today to schedule an appointment for a consultation with one of our skilled professional fiduciaries.