Fiduciary Duty

A fiduciary duty is the legal responsibility to act solely in the best interest of another party.

“Fiduciary” means trust, and a person with a fiduciary duty has a legal obligation to maintain that trust. For example, lawyers have a fiduciary duty to act in the best interest of their clients. Similarly, physicians have a duty to care for, and act in, the best interest of their patients. Likewise, trustees have a duty to manage the assets of a trust for its beneficiaries, and directors to manage corporate assets in the best interest of shareholders.

Some examples of fiduciary duties include duties of undivided loyalty, due diligence and reasonable care, full disclosure of any conflicts of interest, and confidentiality.

While a fiduciary duty may be violated accidentally, it is still a breach of ethics. And to most people, an intentional violation of fiduciary duty is considered especially treacherous.