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Definition of Fiduciary

A fiduciary is the person or institution with the legal authority to act on behalf of another person. Common fiduciaries include accountants, attorneys, bankers, business advisors, financial advisors, and mortgage brokers. They can also include trustees, executors or guardians.

If someone is assigned a guardian or executor they have certain standards of conduct and must perform specific responsibilities. For example, they must carry out their duties prudently and act in accordance with the terms of the trust instrument. They should also understand how much power they have to administer the trust. Everything should be documented. For instance, if they are helping to buy a house they should have copies of all the house purchase documents. If they are responsible for investment decisions they must understand how to minimize the risk of large investment losses for the beneficiary.

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