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The word, “fiduciary”, is frequently used by lawyers to describe certain types of relationships. California Probate Code section 39 defines a “fiduciary” as: “A personal representative, trustee, guardian, conservator, attorney-in-fact under a power of attorney, custodian under the California Uniform to Minors Act… or other legal representative subject to this code.”
The Fiduciary Duty
Black’s Law Dictionary defines a “fiduciary duty” as: “A duty to act for someone else’s benefit, while subordinating one’s personal interests to that of the other person.”
This definition of fiduciary accurately summarizes that a fiduciary duty is a legal duty to act on behalf of another party and to pursue that party’s best interests. The parties to whom this duty of care is owed are called principals. There are additional aspects to “fiduciary duties” that are not included in Black’s Law definition of the term:
- Standard of Duty. Fiduciaries are held to the highest standard of care that is recognized by the law, which includes complete care and good faith.
- Conflicts of Interest. Fiduciaries must avoid anything that would be a conflict of interest between themselves and principals. In the event of a conflict of interest between the fiduciary and the principal/beneficiary, a fiduciary must fully disclose all information about the situation to the principal, and, in most cases, seek the consent of the principal/beneficiary before proceeding
- Financial Control. If the fiduciary has authority over the principal’s money or other assets, the fiduciary must report all financial transactions made by the fiduciary to the principal.
Types of Breaches of Fiduciary Duty
To establish a breach of fiduciary duty, a beneficiary must show that the fiduciary occupied a position of trust and breached that duty to the detriment of the beneficiary.. There are several recognizable situations in which a fiduciary can breach his duties through acting carelessly, recklessly, or unethically, including:
- Answers. If a fiduciary provides answers to questions in an insufficient manner or refuses to answer questions, this might be a sign that the fiduciary has mishandled some aspects of the estate.
- Bias. Because a fiduciary has a duty to act unbiased towards all principals, if a fiduciary appears to act in a biased manner then the fiduciary’s behavior constitutes a breach of their duties.
- Documentation and Record-Keeping. A fiduciary must retain documentation and keep complete and accurate records concerning estate or trust transactions. Fiduciaries who are missing records might be in breach of their duties.
If you are a fiduciary who is seeking assistance to properly carry out your duties or if you are a principal or beneficiary who has questions regarding the manner in which your fiduciary has acted contact the highly experienced fiduciary attorneys in Los Angeles at Keystone Law Group, P.C. As one of the leading probate law firms in Los Angeles, we will assess your situation and guide you step by step for a successful outcome. For further information or to schedule an appointment please contact us at 310.444.9060 or visit http://www.keystone-law.com.