What is a fiduciary?

Since you have been named to manage money or property for someone else as that person’s trustee, you have a special relationship with that person. Texas law calls that relationship a fiduciary relationship, and you are the fiduciary. As Rose’s fiduciary, you owe her a high duty of good faith, fair dealing, honest performance and strict accountability. The law requires you to manage Rose’s money and property for her benefit, not yours. It does not matter if you are managing a lot of money or a little. It does not matter if you are a family member or not.

The role of a fiduciary carries with it legal responsibilities. When you act as a fiduciary for Rose, you have four basic duties that you must keep in mind:

  1. Act only in Rose’s best interest.
  2. Manage Rose’s money and property carefully.
  3. Keep Rose’s money and property separate from yours.
  4. Keep good records.

As a fiduciary, you must be diligent, trustworthy, honest, and act in good faith. If you do not meet these standards, you could be removed as a fiduciary, sued, or have to repay money. It is even possible that the police or sheriff could investigate you and you could go to jail. That’s why it’s always important to remember: It’s not your money!

Different types of fiduciaries exist.

In your role as trustee, you may act as or deal with other types of fiduciaries.

These may include:

Agents under a power of attorney: Someone names an agent to manage their money and property in case they are not able to do it.

Representative payees or, for veterans, VA fiduciaries: A government agency names them to manage government money that is paid to someone, like Social Security or VA benefits.

Guardians: A court names them to manage money and property for someone who needs help.

Supporter under a supported decision-making agreement:  Someone names them to help make decisions regarding money and property.

For other guides explaining the duties of these fiduciaries, visit our homepage: protecttheirmoneytx.org.