If you’re starting to plan your estate, then one term you may have heard time and time again is “fiduciary.” What is a fiduciary, though, and how does the fiduciary you have impact your estate plan?

A fiduciary is a person who manages your assets, simply put. This can be anyone you designate, like your attorney or an accountant. This person has an ethical and legal obligation to make decisions in your best interests. If the fiduciary is a financial representative or advisor, for example, then that person should help you make good investment decisions.

Having a financial advisor help you with your estate plan doesn’t mean you have a designated fiduciary. It’s important to directly state who your fiduciary is in your will and estate plan. While 80 percent of financial advisors do consider themselves fiduciaries, you want to know for certain that you have one who will work in your best interests if you are unable to make decisions yourself or if you pass away.

There are different kinds of fiduciaries you might have appointed. A financial fiduciary is fairly common. Another could be an agent who has power of attorney. A third might be an executor placed in charge of your estate.

When it comes to your estate plan, the most important thing to know about a fiduciary is that the fiduciary has a responsibility to settle your estate and to manage your assets. The fiduciary is bound by your last will and testament, which is why it’s important to draw up a will with your attorney and to make sure it’s legally binding.

Source: U.S. News, “What Exactly Is a Fiduciary?,” Kate Stalter, accessed April 21, 2017