When would an agent risk breaching a fiduciary duty?
When would an agent risk breaching a fiduciary duty?
A Person who is legally bound to put another's interests ahead of their own is a fiduciary person. A fiduciary is an individual or group of individuals who manage assets or other interests on the part of other individuals or groups of individuals. Fiduciary relationships can take various forms:
- An attorney serves as a fiduciary for his or her client.
- Spouses have fiduciary obligations to one another.
- Business partners have fiduciary obligations to one another.
The most well-known fiduciary relationships exist between a trustee and a beneficiary or an administrator and a beneficiary.
As a fiduciary, a trustee or executor/administrator is legally bound to make decisions in the best interests of the beneficiaries/clients, even (and especially) when those interests clash with their own. The fiduciary term denotes the highest legal obligation owed by one party to another. The law understands that enormous power comes with great responsibility. A trustee or executor has a fiduciary duty to:
- Beneficiaries should be treated with care and respect.
- Act reasonably and equitably.
- Keep all possibly pertinent information open, honest, and transparent.
- At all times, act in good faith.
- Prioritize the beneficiary's needs.
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