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 include plan administrators, trustees, and retirement plan committee members.
Trustees have exclusive authority and discretion to manage plan assets, making them fiduciaries; however, not all trustees have the same degree of authority or control.
Conaglen's approach aims to identify 'peculiarly fiduciary duties' as those duties that are owed by fiduciaries and only by fiduciaries.
In Conaglen's case, the argument is that fiduciary obligations have one function only, which is to increase the probability that fiduciaries will fulfil their non-fiduciary obligations.
It has often been suggested that fiduciary law exists to protect vulnerable beneficiaries from exploitation by their fiduciaries. (35) Although some may suppose that the fiduciary concept's purpose is to protect the interests of beneficiaries from harm by their fiduciaries, a possible reason for this misapprehension is that the fiduciary concept's protection of relationships has the incidental effect of protecting those parties whose interests are vulnerable to being abused by others.
As a result, plan fiduciaries should: 1) understand fees paid to recordkeepers and other plan service providers; 2) review fees paid to plan service providers on a regular basis; and 3) revisit disclosures to ensure that compensation paid is accurately disclosed.
(16) The high costs of monitoring are often due to a fiduciary's expertise vis-a-vis their beneficiary, which makes it difficult for beneficiaries to monitor their fiduciaries. (17) Additionally, the fiduciary's performance cannot always be measured objectively in real time.
There are only three enumerated prohibited transactions addressing fiduciaries, but the implications are plentiful for investment advisors and managers.
50 percent of all respondents and 80 percent who describe themselves as fiduciaries say the standard of care is not well regulated.
Conventional fiduciary relationships are formed between fiduciaries and beneficiaries, and found an interpersonal form of accountability, realized through assignment of correlative rights and duties between the parties.
(2) We say that fiduciaries are to be loyal to their beneficiaries rather than to be loyal in general (3) and that beneficiaries have a legitimate expectation of loyalty from their fiduciaries (but not necessarily anyone else).
The Fiduciary Program then monitors these fiduciaries to ensure the veteran's funds are properly expended.