What must a fiduciary do to manage conflicts effectively?

To manage conflicts effectively, a fiduciary must implement clear communication with all parties involved. This approach is crucial because transparency fosters trust and ensures that all stakeholders are aware of the issues at play, their rights, and any relevant developments. Clear communication helps to address potential misunderstandings or feelings of distrust that may arise, particularly in complex situations where multiple beneficiaries may have competing interests.

By engaging openly with all parties, a fiduciary can facilitate constructive dialogue which might lead to collaborative solutions or compromises. This interaction also encourages accountability and reinforces the fiduciary's duty to act in the best interests of all beneficiaries, as it demonstrates a commitment to being fair and inclusive in decision-making processes. The avoidance of communication can lead to increased conflict, resentment, and potential legal challenges, which is why this active engagement is essential in managing conflicts effectively.