Fiduciary Services

Secure Your Legacy, Protect Your Family

Professional Guidance in Discharging your Fiduciary Duty

A fiduciary duty is an obligation to act with loyalty and good faith on behalf of someone or some entity, and it is the highest duty recognized by the law. In its simplest terms, it means that the “fiduciary” (the one who has the duty) owes to the “beneficiary” (the one to whom the duty is owed) the highest degree of care and devotion. The fiduciary must always act in the best interests of the beneficiary. This means that a fiduciary can never take any action which harms the beneficiary, either intentionally or negligently, and may be held liable for actions that damage the beneficiary. The fiduciary must also take care that his or her own interests do not conflict with the interests of the beneficiary.

Since the responsibilities of a fiduciary position are so important, we understand that it may seem overwhelming to owe such a duty to someone or something. Our attorneys are here to help you determine if your relationship to another person or entity is a fiduciary one, and to help you understand the scope of your legal obligations and any risks that may come with such a fiduciary duty. Our attorneys have decades of experience both advising and fiduciaries and serving as fiduciaries.

Services & Questions related to Powers of Attorney

Do I have a Fiduciary Duty?

Oftentimes, a fiduciary duty can arise without you even expressly agreeing to undertake it because it is inherent in a role you assumed. Some common instances where a fiduciary duty exists include:

  • Director or officer of a corporation to its shareholders
  • Personal Representative of a probate estate to the estate’s beneficiaries
  • Trustee of a trust to its beneficiaries
  • Partner to all other partners in a partnership
  • Agent to principal (such as under a Power of Attorney)
  • Guardian to beneficiary
  • Conservator to beneficiary

If you hold one of the roles marked in italics, you owe some level of fiduciary duty in the District of Columbia, Virginia, and Maryland. QRG attorneys can counsel you on your responsibilities and help you navigate the choices that may arise.

Hiring a Lawyer as Your Fiduciary

Sometimes a professional fiduciary is needed because there is no person at hand who possesses the qualifications to take on the burden of a particular fiduciary role. This can often be the case in the administration of complicated trusts or estates where it seems excessive or imprudent to ask a family member or friend to manage assets if something happens to you. In such situations, hiring a professional fiduciary – such as a trustee, executor, or attorney in fact – is not only appropriate but wise because it helps ensure preservation of the assets.

Professional trustees can be bankers or accountants, but a lawyer makes the best choice. A lawyer is well versed in fiduciary duties because a lawyer owes a fiduciary duty to each one of her clients. Lawyers are also bound to follow written ethical rules and are answerable to local licensing authorities, unlike bankers or accountants. The lawyer must always act in the best interest of the client and is obligated to give advice and take actions that will benefit the client and protect the client’s interests. Should a conflict of interest arise, the lawyer must immediately make full disclosure of such conflict and take steps to immediately end the conflict regardless of the personal cost to the lawyer. 

QRG offers professional fiduciary services that can relieve the burden on your loved ones and give you the peace of mind that your assets will be in capable and attentive hands. Our firm is well-equipped to account for fiduciary assets and prepare tax returns. Most importantly, our attorneys are experts the laws of DC, Maryland, and Virginia that govern trusts, estates, and powers of attorney.

What if My Assets include a Business?

QRG attorneys represent small businesses in DC, Maryland, and Virginia. We can step in to manage your business interests even if that requires serving as a director, officer, or managing member of your corporation or LLC. 


Powers of Attorney Basics for DC, Northern Virginia & Maryland

What is a financial power of attorney?

A power of attorney (POA) is a document that grants a specified individual the right to act as the grantor’s agent. The individual who creates the power of attorney, often called the Principal, can dictate the scope of the individual’s authority. For example, the Principal can designate one person to deal with one particular issue (for example, filing tax returns or completing a sale of real property), which is called a limited or specific power of attorney, or provide him or her with broad authority to handle any issues that arise should he or she become incapacitated. The latter version is called a general POA or a durable POA (durable means that the document is valid until it is revoked or the principal dies). The Principal may specify when a general/durable POA is active, immediately upon execution or when the Principal becomes incapacitated.  In essence, your agent under your financial power of attorney may carry out transactions authorized under the power of attorney as you could do for yourself, so it is critical to nominate a person of utmost trust to serve as your agent.

What is an agent?

An agent is a person or entity with the legal authority to act on behalf of another (again, the Principal). Agency law is complicated, but the general proposition holds that the agent has responsibilities both to the Principal and third parties with whom the agent does business.

What is an attorney in fact?

An attorney-in-fact (AIF) is another term to refer to the agent who holds authority under a power of attorney.

What is a contingency?

A contingency is an occurrence that must happen in order for something else, in this case the granting of powers under a POA, to become effective. Typically, the contingency embedded in a POA is the incapacity of the principal.

What are the duties of an AIF?

An AIF is responsible for maintaining accurate and diligent records of all transactions and decisions that he or she makes on the principal’s behalf. Some of the types of decisions that an AIF can make include gifts of money, financial decisions, and the recommendation of a guardian for the principal’s minor children or dependents. The principal can designate any adult as his or her AIF, including an adult child or trusted friend. A principal might designate their attorney or accountant to serve as AIF if her affairs are complex enough to justify the cost of appointing a professional fiduciary.

What is an advance directive?

An advance healthcare directive provides specific instructions to healthcare providers if you are in a coma, in a vegetative state, terminally ill, or so sick that you are unable to communicate. The advance directive tells your treating physicians what measures they should use to treat you or when to stop using those measures. In many cases, people use advanced healthcare directives to let their physicians know that they do not want any extraordinary life-saving measures used.

What is a healthcare power of attorney?

A health care power of attorney is a form of advanced healthcare directive that allows you to appoint someone to make healthcare decisions for you in the event that you are unable to make them for yourself. When appointing an agent under a healthcare power of attorney, you should nominate a person who is well aware of your thoughts concerning medical treatments you would or would not pursue and is able to carry out your intentions.

Can I have both?

At Quinn, Racusin & Gazzola, we counsel clients to execute health care POAs that also contain advance directives because it is important to specify your wishes to the extent one can foresee circumstances and to provide guidance to your health care agent. If the instructions do not provide a clear answer, then your agent will be authorized to tell your medical providers what you would have wanted in that situation.

Can a POA be revoked?

The principal can revoke a POA if she has legal capacity to understand the significance of her revocation on a fundamental level. She need not comprehend every possible effect of the revocation.

I recently received a diagnosis for progressive dementia. When should I execute a POA?

Your doctor will make a recommendation, but it is a good idea to raise the topic with her as soon as possible after diagnosis. Some kinds of dementia progress slowly and some kinds progress rapidly. It is possible to lose capacity to execute a POA by waiting too long. In that case, the court will need to create a guardianship.

What is a guardianship?

A guardianship is a court-supervised appointment that is used when individual can no longer make sound or safe decisions regarding the care of his or her person or property and that person has not designated an agent under a POA. A court may also appoint a guardian when an individual has become exposed or susceptible to undue influence and fraud. 

A guardianship essentially involves removing an individual’s legal rights, so great care and attention is paid during the appointment process. To appoint a guardian, an individual must petition the court that provides a detailed and thorough explanation of the events or concerns necessitating the appointment of a guardian. Typically, most states require that the individual seeking the appointment of a guardian (also referred to as the Petitioner) provide sufficient notice to all individuals affected by the proceeding, in addition to providing the individual in question with independent legal counsel. The law also usually requires a heightened standard of proof, clear and convincing evidence, of the individual’s lack of capacity and provides the individual alleged to be incapacitated with the right to a jury trial.

How do the duties of a guardian compare to that of an AIF?

The duties of a guardian (referred to as “guardian of the person” in some jurisdictions) and a health care agent under a power of attorney are similar.  They both make decisions about medical treatment, living arrangements, and end of life care for the individual requiring assistance.  The primary difference is that a guardian is appointed by the Court and subject to Court supervision, which is more expensive and public. Generally, the need for the appointment of a Guardian is eliminated when a person plans for incapacity by executing a Health Power of Attorney appointing a health agent and one or more alternate or successor agents.

What is a conservator?

As recently spotlighted by the Britney Spears case, a conservator (referred to as “guardian of the estate” in some jurisdictions) is a person who only handles the financial affairs of the individual requiring assistance. A Court appoints a Conservator when a person is unable to manage their own financial affairs and has not planned for incapacity by executing tend to protect the subject from bringing about their own financial ruin whereas guardianships are necessary when the subject cannot take care of themselves effectively at all. 

Can a POA be challenged?

Yes. A court may invalidate a POA if it was procured by fraud, coercion, or if undue influence exerted on the principal or if someone can prove the principal could not understand what she signed (i.e. she lacked capacity).  It may also be challenged is the person acting as your agent is not acting in your best interest.

If you think someone might try to challenge your POA, retaining a lawyer can help prevent that person from being successful.

Contact an Experienced Estate Planning Law Firm Serving DC, Northern Virginia & Maryland That You Can Trust

The estate planning attorneys at Quinn, Racusin & Gazzola Chartered are here to help whether you are just beginning to consider estate planning or need to update an existing plan for DC, Virginia or Maryland.