fiduciary

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Related to Fiduciary duties: Fiduciary relationship

Fiduciary

An individual in whom another has placed the utmost trust and confidence to manage and protect property or money. The relationship wherein one person has an obligation to act for another's benefit.

A fiduciary relationship encompasses the idea of faith and confidence and is generally established only when the confidence given by one person is actually accepted by the other person. Mere respect for another individual's judgment or general trust in his or her character is ordinarily insufficient for the creation of a fiduciary relationship. The duties of a fiduciary include loyalty and reasonable care of the assets within custody. All of the fiduciary's actions are performed for the advantage of the beneficiary.

Courts have neither defined the particular circumstances of fiduciary relationships nor set any limitations on circumstances from which such an alliance may arise. Certain relationships are, however, universally regarded as fiduciary. The term embraces legal relationships such as those between attorney and client, Broker and principal, principal and agent, trustee and beneficiary, and executors or administrators and the heirs of a decedent's estate.

A fiduciary relationship extends to every possible case in which one side places confidence in the other and such confidence is accepted; this causes dependence by the one individual and influence by the other. Blood relation alone does not automatically bring about a fiduciary relationship. A fiduciary relationship does not necessarily arise between parents and children or brothers and sisters.

The courts stringently examine transactions between people involved in fiduciary relationships toward one another. Particular scrutiny is placed upon any transaction by which a dominant individual obtains any advantage or profit at the expense of the party under his or her influence. Such transaction, in which Undue Influence of the fiduciary can be established, is void.

fiduciary

1) n. from the Latin fiducia, meaning "trust," a person (or a business like a bank or stock brokerage) who has the power and obligation to act for another (often called the beneficiary) under circumstances which require total trust, good faith and honesty. The most common is a trustee of a trust, but fiduciaries can include business advisers, attorneys, guardians, administrators of estates, real estate agents, bankers, stock brokers, title companies, or anyone who undertakes to assist someone who places complete confidence and trust in that person or company. Characteristically, the fiduciary has greater knowledge and expertise about the matters being handled. A fiduciary is held to a standard of conduct and trust above that of a stranger or of a casual business person. He/she/it must avoid "self-dealing" or "conflicts of interests" in which the potential benefit to the fiduciary is in conflict with what is best for the person who trusts him/her/it. For example, a stockbroker must consider the best investment for the client, and not buy or sell on the basis of what brings him/her the highest commission. While a fiduciary and the beneficiary may join together in a business venture or a purchase of property, the best interest of the beneficiary must be primary, and absolute candor is required of the fiduciary. 2) adj. defining a situation or relationship in which a person is acting as a fiduciary for another. (See: trust, fiduciary relationship)

fiduciary

adjective commanding belief, commanddng confidence, confidential, deserving belief, fiducial, founded in confidence, reliable, sound, trusted, worthy of belief, worthy of credence
Associated concepts: fiduciary bequest, fiduciary bond, fiduuiary capacity, fiduciary relation

fiduciary

noun agent, caretaker, custodian, guardian, one who handles property for another, one who transacts business for another, person entrusted with property of another, trustee
Associated concepts: escrow, trust
See also: executor, pecuniary, trustee
References in periodicals archive ?
Surprisingly, given their importance, we know relatively little about the justification for fiduciary duties.
Keeping abreast of the nature of fiduciary duties and some circumstances where courts have determined that CPAs had a fiduciary responsibility to their clients will help you stay out of hot water.
Although the Company's management has now provided sketchy details about yet another possible transaction, there can be no assurance that the Company can effectuate a transaction that maximizes stockholder value and is consistent with sound business judgment and in accord with the required fiduciary duties.
The FLP should preserve the general partner's fiduciary duties toward the limited partners.
While much has been written about the fiduciary duties owed by officers and directors in corporations and the duties of majority shareholders or controlling shareholders in both publicly held and closely held corporations, comparatively little has been said about the minority shareholder's obligations to his fellow shareholders in a closely held corporation.
Jurick, Triechler, Bunger and Babilla for alleged breaches of their fiduciary duties to the minority stockholders of Sport Supply Group, Inc.
The Court focused on the fiduciary duties of a majority shareholder and director; it concluded that Sec.
Some typical relationships in which fiduciary duties arise are agent/principal, trustee/trust, certified financial planner/ investor, and lawyer/client.
These authors contend that nonproperty based theories are too narrow in scope largely because fiduciary duties can arise in contexts which include confidential information and other circumstances in which traditional notions of property play no role.
Legislators have taken steps to impose fiduciary duties on residential mortgage brokers, and courts sympathetic to distressed borrowers have recently decided, in a number of cases, that mortgage brokers owe fiduciary duties to borrowers.
They are all closely held corporations, and as such, their shareholders may have fiduciary duties to each other that shareholders of publicly traded corporations do not have.