There are a variety of situations in which a person or parties owe a special legal duty to another party, and a violation of this duty can result in major consequences. To ensure you are living up to this duty, you need to understand the legal concept of fiduciary duty, how it is applied, and what is expected of you to best protect yourself from claims of breaching a fiduciary duty.
What Is Fiduciary Duty?
Fiduciary duty is the legal obligation for one party, known as a fiduciary, to act in the best interest of another party. The fiduciary is often entrusted with the care of money, property, or a business. The fiduciary is strictly forbidden from profiting off of the relationship unless explicitly agreed upon by all parties. Special care should be taken to ensure there are no conflicts of interest between the fiduciary and the party they owe their duty to.
Examples of Fiduciaries:
- Trustee and Beneficiary – Estate planning often involves the appointment of a trustee and a beneficiary. In this arrangement, the trustee holds the power to handle assets in the name of the trust, but must always do so in the best interest of the beneficiary.
- Guardian and Ward – The guardian and ward relationship is unique in that the fiduciary or guardian is given legal guardianship over a minor, or a ward. The guardian is responsible for ensuring the ward receive the appropriate care.
- Principal and Agent – The relationship between a principal and agent can be more broadly applied. The principal can be any individual, corporation, partnership, or government agency; the agent or fiduciary is legally appointed to act on behalf of the principal without a conflict of interest. Common types of this relationship include investors and fund managers or shareholders and acting management.
- Attorney and Client – The relationship between an attorney and his or her client must exhibit the highest level of trust and confidence. As the fiduciary, attorneys must act in complete fairness, loyalty, and fidelity on behalf of their clients.
Adair Myers Graves Stevenson: Breach of Fiduciary Duty Attorneys
Sometimes a breach in fiduciary duty is obvious, but other times it isn’t always cut and dry. If you feel like someone is breaching a fiduciary duty, or you are being accused of breaching your fiduciary duty, you need an experienced attorney to help determine if a breach has occurred. The lawyers at Adair Myers Graves Stevenson have extensive experience representing clients in fiduciary duty disputes. Call us today to schedule a free 30-minute consultation to learn about your legal options.