A fiduciary is a person who assumes responsibility for a position of trust. Fiduciaries serve by court appointment as guardians, conservators and personal representatives of estates. They also serve by agreement as trustees, representative payees, or as agents under powers of attorney.

It is said that there are 26,000 “orphan” seniors in San Diego alone. And many seniors with family choose to appoint a Professional Fiduciary to avoid burdening family members. Even the most capable adult child is frequently fully committed to work and home responsibilities and may not live conveniently nearby. And, of course, many family members would not be a good choice for fiduciary work due to the lack of appropriate skills or the potential for conflict with siblings or other relatives.

The fiduciary as trustee has the responsibility of carrying out the terms of the trust as set forth in a trust document. A trust can be created by the language found in a will or a document created during life. If the former, it is a testamentary trust; if the latter, it is a living trust. The trustee is usually a person named by the creator of the trust in the trust document. In some cases, the trustee cannot carry out his or her duties either because of incapacity or death. If there is no named successor trustee who can serve, the court has the responsibility of appointing a trustee, usually someone who is nominated by the trust beneficiary(s). Trustee duties can include funding the trust with appropriate assets, safeguarding assets, investing the trust assets according to the Prudent Investor Rule (as set forth in the Probate Code), reporting to beneficiaries (as set forth in the Probate Code) filing income tax returns for the trust and making distributions in accordance with the trust terms.

The Fiduciary as Conservator is the person who is legally appointed to manage the Conservatee’s estate and/or person. A Conservatorship is a legal tool to provide management for the financial and/or personal affairs of individuals deemed by the court to be physically or mentally incapacitated. A Conservatee is a person who is the subject of a conservatorship. A Conservator of the Person is appointed by the court to assume responsibility for decisions regarding the health and welfare of a person. A person is determined by the court to be incapacitated when he or she lacks sufficient understanding or “capacity” to make or communicate responsible decisions concerning his or her daily living needs. A Conservator of the Estate is responsible for the prudent use and protection of the conservatee’s assets. The conservator is responsible for inventorying, marshaling and managing all assets and benefits belonging to the Conservatee. The conservator receives income, pays obligations of the estate, applies for pensions, and organizes data for the preparation of income tax returns and other related duties.

Anyone who believes a person is incapable of performing their activities of daily living (i.e cooking, bathing, toileting, getting dressed, etc), showing problems in managing their own finances, and/or seems to be susceptible to detrimental undue influence or outright theft by third parties, can file a petition the Probate Court to have a person conserved.

The interested party can contact an experienced Probate Attorney to help them with preparing and submitting the Conservatorship Petition to the court. There is a cost to the interested party to file a petition with the court but if the court grants the petition, the party can most likely recover any out-of-pocket costs for their attorney and the court costs from the estate of the conserved person.

The Probate Court will appoint an attorney to represent the proposed conservatee only in the Conservatorship Proceeding. The Court will also assign a Court Investigator to meet with the proposed conservatee and all other parties to gather information/history, determine whether there is support for the petition, and if there are possible objections to the petition. The court will also require a capacity declaration for the proposed conservatee to be prepared and signed by a physician or neuropsychologist. The court will schedule the matter for a hearing where the judge will review the declarations of all interested parties, the court investigator report, and the capacity declaration before deciding to grant the petition for conservatorship.

A conservator can be a family member, a professional fiduciary, or another interested party. The petition document will contain the name of the person being proposed as the Conservator. The person appointed has a fiduciary duty to serve only in the best interest of the conservatee and will be held accountable by the Probate Court to follow all the requirements itemized in the Probate Code. Anyone serving as a conservator should engage a competent probate attorney to represent them as the Conservator to ensure that they are performing all duties as required in the Code and by the Court. This will help the Conservator from making errors that could result in personal liability.

The probate court often appoints an attorney to represent the alleged incapacitated person. A court investigator is also appointed by the court to determine the need for a conservator and to recommend a suitable person to serve in that role. All issues and information are brought before a probate court judge who decides if the person is incapacitated or in need of protection and, accordingly, appoints a conservator. The appointed fiduciary is accountable to the court for his or her work. The fiduciary must report to the court and receive the court’s approval in carrying out his or her responsibilities. The court requires the posting of a surety bond by the conservator, which is intended to protect the assets of the conservatee’s estate.

The fiduciary as personal representative is an individual appointed by the probate court to administer the estate of a person who has died, referred to as a “decedent.” A personal representative will either act as an Executor if named in the will, or as an Administrator if not named in the will, or if there is no will. The personal representative inventories and safeguards assets, collects income, verifies and pays obligations, identifies and notifies heirs and beneficiaries, and distributes assets.

The fiduciary as representative payee is a person designated by the Social Security Administration or other retirement plans to receive the income and pay the expenses of an incapacitated individual.

The Probate Code is the principal body of law that governs fiduciary activities. The fees for attorneys and estate administrators for Probate Estate administrations have "statutory fees" defined in the code. These fees are calculated as a percentage of the value of the probate estate. Fiduciary cases like trusts, POA's and conservatorships can be court supervised or non-court supervised. In most court-supervised cases, the local Probate Court with jurisdiction may publish fees that they deem as "reasonable" since the Probate Code only requires fees to meet the reasonableness test. In non-court-supervised cases, fees may be addressed in the estate planning documents but the Probate Code also requires fees to be "reasonable" so if fees are ever challenged in court for a non-court supervised case, the local court would try to determine if those fees are reasonable. This reasonableness test would apply to any person (lay or professional fiduciary) seeking payment of fees from an estate.

Professional Fiduciaries are governed by state statute which is administrated by the California State Fiduciaries Bureau. This Bureau has the legal authority to suspend or revoke the license of a Professional Fiduciary. In addition, each California county has a Probate Court as part of its Superior Court system which oversees the conduct of all lay and professional persons serving in a fiduciary capacity. Courts may appoint a Professional Fiduciary as a neutral third party to protect vulnerable and incapacitated people from abuse, neglect, and exploitation.

The Profession Fiduciary Association of California (PFAC) is made up of Licensed Professional Fiduciaries who must abide by both the State License Code of Ethics and the PFAC Code of Ethics.

The responsibilities of a fiduciary acting as an Agent under Power of Attorney include the following: For health care, the fiduciary acts as attorney-in-fact to make health-care decisions, including placement, medical, treatment, and final burial arrangements. People who have prepared an Advance Health Care Directive have usually included guidance to the Health Care Agent in making decisions that support their personal wishes.

An Agent under a Power of Attorney for Finances has the authority/power to act on behalf of the Principal in only those financial areas outlined in the POA document which can be very broad powers or very limited.

Powers of Attorney name an agent to act “in addition to” the Principal and not instead of. The exception would be if the Principal became legally incapacitated in which case the Agent would likely be the sole decision maker. Powers of attorney can either take place immediately, at some date in the future, or as the result of some future event such as incapacity or disappearance. Powers of Attorney are revocable at the election of the Principal.

All fiduciaries affiliated with the Professional Fiduciary Association of California (PFAC) must fulfill education and experience requirements. In addition, PFAC members are governed by a Code of Ethics. PFAC members must meet annual educational requirements and standards set by the organization.