In estate planning and elder care, it’s important to understand the different types of fiduciaries—who they are, what they do, and when they are needed. While the term “fiduciary” refers to someone who manages money, property, or personal matters on behalf of someone else, the responsibilities can vary significantly depending on the role.
The most common fiduciary types include trustees, agents under a power of attorney (POA), and guardians or conservators. Each carries a distinct legal authority and set of duties. Choosing the right fiduciary—or being asked to serve as one—comes with real responsibility. Knowing the differences can help you avoid conflict, protect your loved one’s interests, and ensure everything is handled according to the law.
What Is a Fiduciary?
A fiduciary is someone legally obligated to act in the best interest of another person. This role is more than just helpful—it carries legal accountability. Fiduciaries must manage financial and personal decisions responsibly and follow a strict standard of care. Their actions are governed by a legal principle known as fiduciary duty.
Fiduciary duty includes four key responsibilities:
- Duty of Loyalty – All decisions must benefit the individual they represent, not themselves.
- Duty of Care – Fiduciaries must make informed decisions and manage affairs with attention and competence.
- Duty of Good Faith – They must always act with honesty and integrity.
- Duty of Full Disclosure—Fiduciaries must maintain clear, honest communication and records and share relevant information with the person they serve or the court.
These duties apply when someone manages a trust, makes healthcare decisions, or pays bills. Failure to follow them can result in legal consequences, including being removed from the position or held financially responsible for harm.
Are There Different Types of Fiduciaries?
There are several fiduciary roles, each created for specific needs and circumstances. The court appoints some, while others are privately selected. Some fiduciaries manage money, while others oversee personal care or healthcare decisions.
The three most common types include:
- Trustees, who manage trusts and distribute assets.
- Agents under a Power of Attorney, who make financial or medical decisions while someone is still alive.
- Guardians or conservators are people appointed by a court to manage personal or financial matters for people who are unable to do so themselves.
Other roles include estate executors, healthcare proxies, and representative payees. However, this article will focus on the three most frequently used types in senior care: family estate planning and trust management.
Trustee: Managing Assets Through a Trust
A trustee is a fiduciary responsible for carrying out the terms of a legal trust. Trusts hold and manage assets for beneficiaries—usually children, spouses, or charitable organizations. The trustee’s job is to protect and manage those assets according to the instructions written in the trust document.
Trustees are responsible for:
- Managing trust investments and accounts
- Paying bills or distributing income from the trust
- Keeping accurate records and preparing formal trust accountings
- Communicating with beneficiaries and following all the terms of the trust
Sometimes a trustee is a family member. Families often hire a professional fiduciary to serve as trustee, especially when there is conflict, complexity, or no local support. In California, professional trustees must be licensed and follow strict guidelines to ensure full compliance with probate law.
Trustees have a significant fiduciary duty. If they fail to act in the best interest of the beneficiaries or mismanage funds, they can be removed or held liable. Many families prefer to work with a licensed fiduciary who understands legal compliance and trust accounting requirements.
Power of Attorney (POA): Acting on Someone’s Behalf
A Power of Attorney (POA) is a legal document that gives someone else authority to act on your behalf. The person appointed is known as the agent or attorney-in-fact, and they have a fiduciary duty to act only in your best interest.
There are different types of POAs:
- General POA gives broad authority to manage financial matters.
- Limited POA allows action on specific issues (e.g., selling a property).
- Durable POA remains in effect even if the person becomes incapacitated.
- A medical or healthcare POA authorizes someone to make medical decisions if the person cannot do so.
Agents under POA are often used when someone is planning for the possibility of disability or cognitive decline. POAs can be customized to include specific instructions, limits, or expiration dates. Importantly, a POA ends when the person who granted it passes away.
Being a POA agent means you’re responsible for paying bills, accessing financial accounts, coordinating care, or making treatment decisions. If you’re unsure about accepting this responsibility or want help carrying it out, a licensed professional fiduciary can serve in this role and offer expertise in managing financial and healthcare matters.
Guardian or Conservator: Court-Appointed Responsibility
When someone can no longer manage their affairs and has not been assigned a power of attorney in advance, the court may appoint a guardian or conservator. In California, these roles are referred to as conservatorship.
There are two main types:
- Conservator of the Person – Responsible for personal care, daily needs, housing, and healthcare decisions.
- Conservator of the Estate – Manages the person’s income, assets, and financial obligations.
Unlike a POA or trustee, conservators must report regularly to the court and obtain approval for many actions. This is because the person being served (called the “conservatee”) has been legally determined to lack the capacity to make decisions independently.
Families often pursue conservatorship when a loved one shows signs of cognitive decline, refuses needed care, or is being financially exploited. A licensed professional fiduciary can be appointed as a conservator to provide neutral, court-compliant oversight when no one else is available or appropriate for the role.
Comparing Fiduciary Roles: Which One Do You Need?
While all fiduciaries share a duty to act in someone else’s best interest, their roles and legal authority differ. Choosing the right type depends on the needs of the individual, their capacity, and the complexity of their situation.
Here’s a simple comparison:
| Role | Appointed By | Scope of Authority | Ends When |
|---|---|---|---|
| Trustee | Grantor or Court | Trust assets and distributions | Trust terminates or by court |
| POA | Person (Principal) | Financial or medical decisions | Revoked or person passes away |
| Conservator | Court | Daily care of finances | Court terminates or person recovers |
Choosing the wrong role—or misunderstanding what each one does—can cause legal issues, family disputes, or care delays. That’s why it’s important to plan and, when needed, consult professionals who understand fiduciary law and senior care dynamics
Get Clarity Before You Choose
Whether creating a trust, assigning a power of attorney, or navigating a court-ordered conservatorship, fiduciary roles come with serious legal responsibilities. Understanding the differences between trustees, POAs, and guardians helps ensure your plans are carried out clearly and legally.
At Smith Marion, we provide licensed fiduciary and trustee services to individuals and families throughout California. Our team prepares court-compliant accountings, supports complex estate transitions, and acts as a neutral third party when families need clarity and protection.
If you’re unsure which fiduciary role is right for your situation, or if you’ve been appointed as one and need help managing your responsibilities, we’re here to help you confidently take the next step.