When a person passes away, many individuals may be responsible for supporting the estate administration process. This can include professionals, like lawyers and financial advisors, as well as executors and trustees named in the will.
Legally, members of certain professions in Ontario are bound by a duty to act in their clients’ best interest. Failure to do so can lead to serious consequences for the individuals who were named as fiduciaries.
A fiduciary is someone named to manage property or assets on someone else’s behalf. In a fiduciary relationship, the person is legally bound to act in the best interest of the client he or she is serving by caring for the property. This client is legally referred to as the principal. The principal may be the owner of the property or, if they pass away, their beneficiary.
Friends and family can be fiduciaries. For example, a person with responsibility under a power of attorney has a responsibility in this regard. Other times, this duty is applied to professionals. Fiduciary duties are not only seen in estate planning. Directors of corporations, for example, have a duty to act in the best interest of the company and shareholders.
It is important to know that, although fiduciary duties are automatically applied to people in some roles, like trustees and executors, this is not the case for all support or professionals. For example, someone may call themselves a financial advisor without necessarily being part of a body that requires fiduciary duties. Those who feel they have been wronged by fiduciaries in any estate administration process should contact an Ontario lawyer to understand their legal options.