fiduciary

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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 ?
Plan fiduciaries must review service provider fees annually against reliable indicators as part of proper plan governance.
Fiduciary law protects important social and economic interactions of high trust and confidence that create an implicit dependency and peculiar vulnerability of beneficiaries to their fiduciaries.
However, the DOL provided some additional flexibility to plan fiduciaries who are determining how to proceed.
When fiduciaries violate ERISA's fiduciary duties or the prohibited transaction rules, they may be held personally liable for any losses to the investor resulting from the breach.
Sometimes fiduciaries are retained because the beneficiary or benefactor is incapable of attending to the affairs subject to the mandate.
63) Second, fiduciaries are not always required to fulfill the mandatory bond requirement.
To take seriously the theory of fiduciary government means to "hold government officials and employees, including policymakers, to standards analogous to those imposed on private fiduciaries.
The main reason behind the limitation of fiduciaries to these two specific categories is to prevent tax evasion and money laundering.
GAO found that VA did not always take required actions to monitor fiduciaries within established time frames or document in the beneficiary's case file that these actions were taken.
In contrast, as suggested by their state licenses, stock brokers and insurance sales agents who act only in a traditional sales capacity by limiting their advice to recommended purchases are typically considered salespersons, not fiduciaries.
10) "[T]he statute, regulations and case law lead to the conclusion that trustees are fiduciaries by virtue of their position.
Boards that are responsible for appointing ERISA fiduciaries to oversee their companies' benefit plans are also responsible for monitoring those appointed to serve in that capacity.