Conflicts of Interest and Fiduciary Duties in Florida Probate
Estate planning is a pivotal and important aspect of every person’s life. It is one of those things where even if you make no decision – that in itself is a decision. You either build a solid estate plan that caters to your needs and the needs of your loved ones, or you leave your legacy to the mercies of intestacy law.
One of the crucial elements to get right in the process of estate planning is choosing your estate executor, and ensuring that this entity does not have an improper conflict of interest. But what is an Estate Executor, a fiduciary duty, or a conflict of interest? This article aims to answer some of the most common questions on this topic.
What is an Estate Executor?
The Executor of an estate is the individual whose duty it is to carry an estate through probate. A primary duty that his individual is tasked with ensuring that the last will and testament is carried out in accordance with the terms of the document. This includes contacting the beneficiaries, acting in the best interest of said beneficiaries, etc.
What is a Fiduciary/ Fiduciary Duty?
A Fiduciary is a person or entity who has a legal obligation to act in the best interest of someone else. For example, in estate planning, several people/entities are fiduciaries. Some examples include personal representatives of an estate, attorneys, financial advisors, guardians to minors, etc.
Under Florida law, a trustee and personal representative have the same fiduciary duty/obligation to beneficiaries.
What Is a Conflict of Interest?
A conflict of interest might occur in many arenas through the business and legal world. In the context of estate law or probate, a conflict of interest might occur if a person or entity has a competing interest, or competing loyalty, that could affect their ability to carry out their fiduciary duty with fidelity. In the probate process or estate litigation this could include a number of different entities or situations. For example, a person who has a personal stake in the outcome of a dispute may have an improper conflict of interest. Another potential conflict of interest may arise if the executor of an estate has a business relationship with one of the beneficiaries of the estate.
If it appears a conflict of interest may be present or arise, the parties must disclose the conflict. This is to avoid potential prejudices or bias which might occur if the case moved forward with the parties in place. Failing to disclose a significant conflict of interest could lead to serious legal consequences.
Breach of Fiduciary Duty
Failing to disclose a conflict of interest is considered a breach to the fiduciary duty owed to beneficiaries. A Fiduciary who breaks this duty should be prepared for the potential of severe consequences from the court.
A violation of fiduciary duty is important because this breach of trust may result in the Fiduciary making decisions and taking actions that unfairly affect one or more parties, due to the Fiduciary’s bias.
To avoid any such issues arising later, fiduciaries should disclose any marked potential conflicts of interest as soon as they arise. An experienced estate law and/or probate litigation attorney can help the estate understand how to fairly navigate the situation moving forward.
Contact Suncoast Civil Law
The Sarasota wills and probate lawyers at Suncoast Civil Law have the experience and expertise necessary to guide clients through any legal quandary and arrive at the best possible solution. If you are in need of legal assistance, contact our office to begin discussing your situation today.