A fiduciary duty is the legal obligation that one party has to another to act in their best interest. The person obligated with the highest standard of care to the other person is known as a fiduciary. A fiduciary can be entrusted with money, property, or an obligation to act in the other person’s best interests. Fiduciaries should act with good faith and loyalty toward the principal in the relationship. A failure of a fiduciary to uphold his or her responsibilities can lead to liability.
What types of relationships can require a fiduciary duty?
There a number of relationships in which a fiduciary may exist. Some of those relationships can include, but are not limited to,
Business relationships. A bank can have a fiduciary duty to a customer if the bank is in control of the customer’s assets and/or money.
Officer/director-corporation relationships. Officers and/or directors of corporations have a fiduciary duty to act in the corporation’s best interest. They also may have a duty to bear a fiduciary responsibility to corporation shareholders.
Shareholder-shareholder relationships. A majority shareholder may have a fiduciary responsibility to a minority shareholder.
Trustee-beneficiary relationships. A trustee can have a fiduciary duty to a beneficiary since he or she is entrusted with the control of the beneficiary’s trust.
Partnership relationships. Partners in a business can have a fiduciary duty to one another, and to act in the business’s best interest.
What Happens If there is breach of a Fiduciary Duty?
If a fiduciary breaches his or her duty, they may be held liable. As a result, a person may be able to bring a lawsuit for a breach of fiduciary duty. Civil penalties in a breach of fiduciary duty case can be high.
If you fear you have breached a fiduciary duty, of if you think someone has breached a fiduciary duty to you, you should contact an attorney. Our experienced team of attorneys can review your matter and advise you on the legal options for your specific situation. Call us today