Fiduciary Duty

Fiduciary law

A fair amount of litigation is generated by an individual’s breach of his fiduciary duty to another. A fiduciary is a person in whom another has placed the utmost trust and confidence to manage and protect the other’s property or money or other interests.  A fiduciary duty is created when the fiduciary accepts the trust and confidence reposed in him by the other.

This test is met when applied to certain relationships among individuals. For instance, partners owe a fiduciary duty to one another. A husband and wife owe each other a fiduciary duty. A lawyer always a fiduciary duty to his client. A doctor owes a fiduciary duty to his patient. A real estate broker owes a fiduciary duty to his client. A trustee owes a fiduciary duty to the beneficiary. Corporate officers and directors owe a fiduciary duty to the corporation and to minority shareholders. A managing member of a limited liability company owes a fiduciary duty to the non-managing members.

One breaches his fiduciary duty when he fails to act with care to protect the other’s interests, or acts to the detriment of the other, or uses his position as a fiduciary to benefit himself, even if doing so does not hurt the one to whom he owes the fiduciary duty.

For articles discussing various issues relating to fiduciary duties, see the Blogs section of this website.