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What Are the 5 Fiduciary Duties?

Business Disputes In Miami

When a person owes fiduciary duty to another person, they are called a fiduciary and are typically responsible for the management of that person’s assets or money. Their duties can be broken down into 5 separate, distinct, and yet yet equally important responsibilities. 

Failure to meet one’s fiduciary duty when managing the assets or finances of another person may be legally actionable. Here’s what to know and where to get legal support. 

1. The Duty of Care 

Fiduciaries have a specific duty of care, which means they must commit to acting in good faith, being honest, and to exercise reasonable care in the completion of their tasks. 

2. The Duty of Loyalty 

Fiduciaries have a duty of loyalty to their principals. They must put their principal’s financial interests ahead of their own and make decisions based on the best interests of their principals

For example, if an investment manager decided to invest in a particular stock that might benefit him more than his client, the investment manager may be held accountable for breach of fiduciary duty. 

3. The Duty of Confidentiality 

Fiduciaries are required to maintain confidentiality about the financial dealings of their principals. They may not disclose information that isn’t already public or that they have not been given express permission to share. Confidentiality must not be compromised at any point in the fiduciary relationship. 

4. The Duty of Accounting  

Fiduciaries must use industry-standard, appropriate accounting methods to track all of their principal’s financial transactions. A fiduciary has the responsibility of ensuring that all transactions made in the name of the principal are lawful and to ensure that the principal’s assets are safeguarded and properly accounted for.

5. The Duty of Obedience 

Fiduciaries must act in accordance with guidelines set forth by their principals. For example, the treasurer of an association or organization must adhere to the rules and bylaws established by the organization, even if the fiduciary disagrees with them. 

Get Help With Breach of Fiduciary Duty & Other Business Litigation Matters 

If you believe you may have been impacted by a breach of fiduciary duty, don’t hesitate to reach out to Feinstein Real Estate Litigation & Business Law. We have the skills and experience needed to represent all types of cases, including high-net worth and contentious business litigation. Call now for a consultation at 954-767-9662 (Fort Lauderdale), 561-981-6212 (Boca Raton,) or 305-728-5267 (Miami).

By : admin | September 15, 2021 | Contract Disputes