Who is a prudent person? What is a prudent person? Are you prudent? It’s not the most commonly-used word, but if you’re ever appointed as a trustee or executor, you’re going to learn the definition pretty quickly. Your goal will be to become prudent personified. In fact, “the prudent person” is the standard against which your competence as trustee, executor, or representative of an estate will be measured. Anything short of prudent may leave you subject to personal liability for losses or damages within an estate or the financial affairs of the principal.
Without going into the nitty-gritty of the myriad of responsibilities in managing a trust/estate, the Consumer Financial Protection Bureau provides a series of great guides on managing someone else’s money. Controlling another’s finances is the heart of your duty as a trustee/executor, but it also occurs when serving as someone’s attorney-in-fact, guardian, or just as a trusted friend. Find the guides linked from the CFPB’s blog post here. They provide a way to order free hard copies as well.
If you’re going to take on the mammoth responsibility of managing someone else’s financial resources, and you want to avoid a lawsuit down the road, do the prudent thing and study up on how to be prudent.