Fiduciary Duty and What it Means to You

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Fiduciary duty is a concept that appears across a wide variety of areas of law, so much so that most people in California will probably serve in a fiduciary capacity at some point in their lives. While the details of fiduciary responsibility vary depending on the context, it is always a high duty that can subject you to liability if not executed diligently and properly.

There are several common contexts in which a person may be vested with fiduciary power and duty:

  • The officers, directors, partners or members of a corporation or other business
  • The trustee of a trust
  • An agent serving under a power of attorney
  • The administrator or executor of a deceased person’s estate
  • Individuals and businesses contracted to act as agents or brokers

At is core, fiduciary duty arises when a person or entity is given control over someone else’s property or affairs. Fiduciaries have a legal obligation that can be divided into two components:

  • The duty to act in the best interests of whatever person or entity they represent
  • The duty to exercise the same degree of care a reasonable person would apply to his or her own affairs

Failing to meet these standards, whether willfully or negligently, can not only lead to removal as a fiduciary but can also give rise to liability for any damage the mismanagement caused. Allegations of breach of fiduciary duty are often raised in trust and estate litigation as well as in the business law context through shareholder derivative suits and suits for breach of partnership agreement.

Posted in Estate Planning | Tagged fiduciary power and duty, fiduciary responsibility, power of attorney, trustee

Topics:  Breach of Duty, Estate Planning, Fiduciary Duty

Published In: Business Torts Updates, General Business Updates, Wills, Trusts, & Estate Planning Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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