Best Interests

The term "best interests" refers to a standard and guiding principle that fiduciaries, such as Executors, Trustees, Guardians, and other individuals or entities responsible for managing and making decisions regarding Assets, Beneficiaries or Wards, must follow.

"Acting in one's best interests" means that fiduciaries are legally and ethically obligated to make decisions and take actions that prioritize the well-being, rights, and financial security of the people they represent.

Failure to meet this standard can result in legal consequences, including lawsuits and the removal of the fiduciary from their position.

Important details about the term best interests include:

Beneficiary-Centric: The "best interests" standard places the focus squarely on the beneficiaries' welfare and financial interests. Fiduciaries are required to act selflessly, ensuring that the decisions they make result in the greatest benefit to those they serve.

Loyalty and Avoidance of Conflicts: Fiduciaries must act with unwavering loyalty to the beneficiaries, avoiding any conflicts of interest that might compromise their ability to act solely in the beneficiaries' best interests. They cannot use their position for personal gain or advantage.

Prudent Management: Fiduciaries are expected to manage assets and resources prudently, making decisions that aim to preserve and enhance the value of an Estate or Trust for the beneficiaries.

Reasonable Care and Skill: Fiduciaries are held to a high standard of care and skill in performing their duties. They must exercise the level of care, skill, and diligence that a reasonably prudent person with similar responsibilities would exercise.

Objective Decision-Making: Decisions made by fiduciaries should be objective and based on careful consideration of the circumstances and the beneficiaries' needs. Emotional or biased decision-making is discouraged.

Legal Compliance: Fiduciaries must ensure that all actions and decisions are in compliance with applicable laws, regulations, and the terms of the governing Estate Planning documents such as Last Will and Testaments or trusts.

Accountability: Fiduciaries are accountable for their actions and must maintain accurate records of all financial transactions and decisions made on behalf of the estate or trust. They may be required to provide reports to beneficiaries or authorities.

Communication: Fiduciaries should maintain open and transparent communication with beneficiaries, keeping them informed about the administration process, financial matters, and any significant decisions that affect their interests.

Professional Expertise: In cases where specialized expertise is required (e.g., financial management or legal matters), fiduciaries may engage professionals to provide guidance and support, always with the goal of protecting the best interests of the beneficiaries.