fiduciary

(redirected from fiduciary duty)
Also found in: Dictionary, Thesaurus, Medical, Financial, Encyclopedia, Wikipedia.
Related to fiduciary duty: Fiduciary Responsibility

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 ?
Call me crazy, but that all sounds quite a lot like the implementation of a financial plan to me, which, in turn, sounds like a pretty significant step toward a full-time fiduciary duty for CFPs.
The Committee recognizes that claims for breach of fiduciary duty may arise in different circumstances in addition to those listed above.
The operating agreement should be drafted to thoughtfully consider restrictions on fiduciaries' duties, identifying conduct that the members agree does not constitute a breach of fiduciary duty by the managers or managing members, and exculpatory language that a Florida court would accept as not violating the "manifestly unreasonable" standard.
Let's assume that a CPA who has a fiduciary duty to a client, retirement plan or trust observes that client or entity breaching a fiduciary duty.
We have a fiduciary duty to act in your best interests and provide sound practical advice which is independent of any insurance company's influence.
These efforts may enable us to entertain hypothetical arguments that breach of fiduciary duty should be considered a tort.
In particular, the Supreme Court discussed what it described as the "'fair treatment' component" of the fiduciary duty, a fiduciary duty to ensure that the corporation meets its statutory obligations and a fiduciary duty to ensure that the corporation is a "good corporate citizen.
Smith v Atlantic Properties, Inc, 12 Mass App Ct 201, 201-208, 422 NE2d 798, 800-03 (1981) (25% shareholder owed fiduciary duty to closely held corporation where 80% vote was required to declare a dividend); Hagshenas at 69, 557 NE2d at 322; Illinois Rockford at 223, 242 NE2d at 233-34 (two 50% shareholders of a corporation owed fiduciary duties to each other, and a fiduciary relationship exists in all situations in which a confidential relationship has been established).
Stockbrokers have long been held to have a fiduciary duty to their customers.
The petitioner alleged that this failure to follow his investment directions depleted his interest in the plan by approximately $150,000 and amounted to a breach of fiduciary duty under ERISA.