South Carolina Estate Lawyer A to Z: Fiduciary
October 1, 2011
Installment F of A to Z is FIDUCIARY. A fiduciary is a person (or organization) that undertakes to act as an agent for another person. In the trust and estate context, a fiduciary is a person or entity who undertakes to manage the assets of another person. A fiduciary who manages the assets of a deceased person is called the Personal Representative (in other states this is called the Executor or Administrator), or it is a trustee who is overseeing the trust assets of a deceased person. A fiduciary who manages the assets of a living person is the conservator of an individual (appointed by the Probate Court), or could be a trustee of a trust for a living person.
The concept of a fiduciary has been around for ages. The fiduciary relationship gives rise to several duties that the fiduciary owes to the individual on whose behalf he or she acts. There is a duty of care owed by the fiduciary. An example of this is the duty of the fiduciary to perform due diligence when investing assets under his or her care. There is a duty of loyalty owed as well, which is illustrated in the duty of the fiduciary to be concerned only with what is in the best interest of the individual for whom he or she acts, and not the fiduciary’s own self interest. The great jurist Benjamin Cardozo wrote what is possibly the most famous description of the duty of loyalty when he wrote: “A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior… the level of conduct for fiduciaries [has] been kept at a level higher than that trodden by the crowd.” Meinhard v. Salmon, 249 N.Y. 458 (1928).
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