What does the term fiduciary duty mean?
Though the term fiduciary duty isn’t used all that often, it still relates to several legal roles that can affect our everyday lives. Executioners and trustees can have fiduciary duty, making this term a big part of probate law.
Though, there are other roles that fit into this duty as well. A more expansive definition is listed later on, but to sum up this type of duty, it effectually involves one party selflessly helping another party and submitting to their wishes.
It’s a duty to someone else and carrying out the tasks they assign you for the other party’s purposes. That’s not even getting into what kind of trouble you can get into by carrying out this duty for your own gain.
Helping Another Party
This term, in its simplest sense, is a descriptor which labels the relationship between two parties with one party serving the other. Fiduciary duty is a kind of duty where one party submits to the other party, serving for the sole interest of the second party.
These two parties are referred to as the fiduciary, the party which serves, and the principle, the party which is served by the fiduciary. This relationship may be somewhat akin to employment or servanthood. It’s serious in that the fiduciary may go out of their way to avoid any conflict of interest between themselves and the principle.
There are both elements and precedents that exist for these kinds of relationships. Should something of concern arise, these are what help decide if something has gone wrong. Fiduciary breaches are a real problem and there might need to be protection in case someone is harmed. Unlawful actions can be the cause for a court case, complicating the circumstance further. Four examples of things that may impact the relationship are listed in the following paragraph.
Four Items
Though which elements each jurisdiction has may vary, causation, breach, duty, and damages are the four general elements to go off of. These may be the top factors to come into play when a fiduciary duty claim is made. Something may have gone wrong. Though, in order to better classify what went wrong, it may need to involve one of the four elements.
Causation, the first element, may sound like motive, but this element more so involves proving that the fiduciary party is actually connected and to blame for what went wrong. What does the term fiduciary duty mean.
Breach, the second element, is effectually showing where the other party did something wrong. This can range from neglecting to do something to unlawful action.What does the term fiduciary duty mean
Duty, the third element, is proving that there was a fiduciary duty in the first place. If there was no real agreement, there may not be a fiduciary claim whatsoever.
Damages, element number four, concerns the aftermath of what happened. It involves demonstrating what was the result and is the central part of the claim. No damages means no claim.
Selfless or Else
It cannot be overstated how much fiduciary duty revolves around serving the other party. It could even be suggested that is the sole reason for why the fiduciary party is involved. This duty legally binds them not to try and benefit from the subject manner or to act in ways that are against the principle party. Being anything more than a servant may cause the fiduciary party to find himself dealing with unanticipated problems.
If you’re familiar with the concept of a personal representative, a fiduciary party is effectively held to the same standards as them in terms of honesty and sincerity. Personal representatives are supposed to check everywhere for where the deceased may have remaining debts or bills.
The fiduciary party, similarly, must be an open book and willing to be completely honest with their client. It may be suggested that a fiduciary party is, more or less, a personal representative in one of multiple areas.
Types of Fiduciary
It’s very possible that you could have heard about people acting as fiduciaries and not even knowing about it. However, it’s probable that just about any relationship that follows the aforementioned guidelines and involves two or more people could count as a fiduciary duty. How many roles can become a fiduciary duty may be more than you think.
Previously, it was noted how the fiduciary party must not act out of personal benefit. One of the reasons why this may be necessary, besides saving the principle party money, is because a significant amount of fiduciary duties involve money. Some examples of roles which may involve a fiduciary duty include a trustee, broker, heir, executioner, and agent. There are other roles as well. So, if you ever come across a role where someone wants you to help them out without benefiting yourself, you may have just found yourself offered a fiduciary duty.
Minnesota Probate Lawyers
Just because you’re serving someone else doesn’t mean that you can’t have someone helping you. For example, if you’re acting as a personal representative, talk to a probate lawyer. The law firm of Flanders Law Firm LLC can provide you with one. All you have to do is contact them at 612-424-0398.
They’ll be able to teach you what you can do and can’t do during your duty to ensure that everything is done properly. Though you may intend to fulfill someone else’s desires, there might be legal regulations that dictate how you can see those intentions are carried out. You may be their servant, but that doesn’t mean anything can happen.
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