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Related to Fiduciary Responsibilities: Fiduciary relationship, fiduciary obligations, Fiduciary duties


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.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.


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)

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
References in periodicals archive ?
Since the costs are incurred incident to the change in ownership and not with respect to the board of directors' fiduciary responsibilities or the target's current business operations, capitalization is justified.
Fidelity recently launched a new program to help advisors meet their fiduciary responsibilities when advising retirement plan clients.
Plan sponsors need to understand a broad range of information on expenses associated with their plans to fulfill their fiduciary responsibilities. Sponsors need information on expenses associated with the investment options that they offer to participants and the providers they hire to perform plan services.
Professional money-management at the participant level also strengthens the ability of plan sponsors to meet their fiduciary responsibilities.
Department of Labor is bringing its fiduciary seminar: "Getting It Right--Know Your Fiduciary Responsibilities" to Sacramento Dec.
INVESTMENT COMMITTEES of higher education institutions face a daunting task of meeting their fiduciary responsibilities. In other words, they bear the brunt of ensuring that the investment portfolio is properly managed.
, to unduly influence the three boards of directors in declaring dividends--"was neither ascertainable nor legally enforceable and hence not a right in any normal sense of that term" It noted that the broad discretion the boards enjoyed over dividend policy was restrained by fiduciary responsibilities demanding that they act in the companies' best interests.
Another, a collaborative effort with the Department of Labor, educates employers and pension plan service providers on their fiduciary responsibilities under the Employee Retirement Income Security, Act (ERISA).
The Department of Labor and the AICPA recently announced they have partnered in a national campaign to educate employers and service providers about their fiduciary responsibilities under the Employee Retirement Income Security Act.
Society's contract with the medical profession, which allows the healing professionals to touch patients in the performance of their arts and in pursuit of their fiduciary responsibilities, is perhaps unique among the professions.
"The pension-fund industry needs to discharge higher accounting and fiduciary responsibilities," Dave said.