As you plan your estate in Arkansas, it is important to understand the concept of fiduciary duty. Someone with fiduciary duty has the authority to manage your financial or other interests and agrees to put those interests before his or her own.
Get the facts about fiduciary duty and how it may affect your estate planning decisions.
Fiduciary duty and trusts
If you decide to create a trust as an estate planning vehicle, the person who manages the assets held in the trust has a fiduciary duty. This individual, the trustee, must invest or otherwise the trust property prudently. Upon your death, the trustee distributes the trust assets to your intended beneficiaries according to the terms of your will or trust documents. As part of fiduciary duty, the trustee must notify you if he or she does not think they can fairly and impartially manage the trust.
Personal representatives in Arkansas
Your personal representative also has a fiduciary duty in Arkansas. This person, sometimes called the executor, must act in the best interest of your heirs when settling your estate. He or she must be of sound mind and at least 18 years old. The state prevents individuals from serving as personal representatives with past felony convictions. You can name a corporation as your executor only if it has the authority to act as a fiduciary in Arkansas.
In rare cases, Arkansas can reject an executor selection if the probate court finds the person unsuitable. The court will hold a hearing before your beneficiaries, surviving family members and other interested parties to determine whether a challenged personal representative can continue in this role.