What is fiduciary duty?

Any relationship between two parties in a transaction where at least one of the parties is required to act in good faith and for the benefit of the other party is said to be a fiduciary relationship. One of the most common examples of this is that a lawyer retained by a client, the attorney has a fiduciary duty to act in the client’s best interests in matters pertaining to the reason the lawyer was hired.

While an attorney/client relationship is one of the most common fiduciary relationships, being bound by fiduciary duty can exist in any number of ways.

  • Business partnerships
  • Joint ventures
  • Husband and wife
  • Officers in a corporation
  • A trustee and beneficiaries
  • A guardian and their ward
  • An executor of an estate
  • Pension fund trustees
  • Contractual relationships

When a person does not live up to their responsibilities in these roles, they are said to be in breach of fiduciary duty. This breach generally falls into three categories, including breach of reasonable care (aka negligence), breach of duty of loyalty, or a breach of confidentiality. In other cases, fraud is also considered a violation and is commonly referred to as fiduciary fraud.

It is possible to file a claim against someone who has breached their fiduciary duty. An experienced attorney must be able to prove that a fiduciary duty existed, that it was breached, that there was harm or damages, and that the breach was the cause of the damages.

RMO LLP provides personal and efficient inheritance dispute services to individual and institutional clients. The firm’s attorneys focus on probate litigation involving contested trust, estate, probate, and conservatorship matters. Serving California and Texas, with offices in Los Angeles, Pasadena, Orange County, San Diego, Fresno, the Bay Area, Dallas, and Houston. For more information, please visit https://rmolawyers.com/.

Share on:

Most Popular

Search Topics

Read More

About the Author

Scott Rahn, Founding Partner

Scott Rahn resolves contests, disputes and litigation related to trusts, estates and conservatorships, creating a welcome peace of mind for clients. He represents heirs, beneficiaries, trustees and executors. He utilizes his experience to develop and implement strategies that swiftly and efficiently address the financial issues, fiduciary duties and emotional complexities underlying trust contests, estates conflicts and probate litigation.

Related Articles