What Is A Fiduciary Duty?A fiduciary duty is a legal relationship between at least two parties. The "fiduciary" is the party the duty is imposed on. The "principal" is the party that is owed the duty.
A fiduciary duty requires the fiduciary to act with all of the following:
- the highest standard of care
- the highest order of good faith and fair dealing
- show loyalty
- serve the principal's best interests
- avoid conflicts of interest
What Are A Trustee's Duties Toward A Beneficiary?One of the most common examples of a fiduciary duty arises between trustees and beneficiaries. The trustee is the legal owner of the property of a trust. The beneficiary has no legal title to the property in the trust but may get use of the property without ownership. A beneficiary can show a breach of a fiduciary duty if the benefit, profit, or gain was acquired:
- While there was a conflict of interest: this most often occurs when the fiduciary does not serve the beneficiary's best interests.
- By taking advantage of the fiduciary position: this occurs when a fiduciary profits from his position, which is prohibited in the relationship.
Can I Recover Damages From A Breach Of The Fiduciary Duty?When a principle can show breach of the fiduciary duty, the benefit gained by the fiduciary should be returned to the principal. The exception to this rule is when a fiduciary fully disclosed the conflict of interest and the principal accepted the action. Do I Need To Consult An Attorney About Fiduciary Duties?Fiduciary duties can complex and confusing. An attorney can help fulfill the duties of a fiduciary or determine if a trustee has breached the fiduciary duty. |
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