Fiduciary duties are responsibilities that people in positions of trust owe to those who are relying on them. This most commonly applies to a trustee, but it could also be an attorney, and investment banker, or anybody who has a legally identified obligation to be honest and to work for the benefit of the other party instead of themselves, including, in the District of Columbia, employees. Unfortunately, not every person in a position of trust lives up to what is legally expected of them. If you are dealing with a case of breach of fiduciary duty in DC, it is essential that you contact a dedicated attorney as soon as possible. By working with a civil litigation lawyer who has experience handling cases like these, you could be better prepared to get a positive outcome.
The most common relationship that creates a fiduciary duty is the legal bond between a trustee and beneficiary or the personal representative of an estate and the heirs. However, this duty could also arise in the corporate setting where the officers and directors of corporations and members of the Board all owe fiduciary duties to the corporation, the LLC, or the other members. Sometimes there is a dispute about whether the parties are legally in a position of trust, so codifying this duty in a contract ensures that all parties are aware of the expectations.
The three key elements of fiduciary responsibility are the duty of care, the duty of candor, and the duty of fidelity. Essentially someone who is in one of these positions of trust must be open and honest with the people or entities to whom the duties are owed. They must also be fully honest about everything that is going on, and they should be open to review from the beneficiaries to ensure they are taking all appropriate action to protect that other party’s interests.
What the duty of care is varies based on the specific nature of the fiduciary relationship. Generally, there are established standards of performance and action that someone is expected to achieve on behalf of the party they owe the duty to. Any violations of these standards could be viewed as a breach of fiduciary duty. Any party with a duty must conduct themselves in a way that another reasonable person would in their situation.
The duty of loyalty means that the fiduciary has to put the beneficiary’s interest first, over the fiduciaries’ when the fiduciary is working on matters of interest to the beneficiary. It means that the fiduciary cannot be working for him or herself while in the position of trust on behalf of another. The goals and activities of the fiduciary have to be for the benefit of the beneficiary and never for themselves. They have to serve the interests on the ward or the estate, the account, whatever it is that the fiduciary is managing. In these cases, the fiduciary has been entrusted with protecting or growing another party’s assets and any conflict of interest or personally beneficial action against the estate or account could constitute a breach.
The duty of good faith is not necessarily as hard and fast as the other duties implied with a fiduciary relationship, but it is still important to consider. The duty of good faith means that a person must do their job and what they have been contracted to do to the best of their ability. If they fail to do their best or take unnecessary risks, they may be considered in breach of their duties.
Breach of fiduciary duty occurs whenever any action falls below the standard of care expected of a person in a position of trust and responsibility. Any act that is in self-interest, any act to conceal material information from the beneficiary, and any act where the fiduciary intentionally misrepresents facts to the beneficiary could be a significant problem with far-reaching ramifications. To learn more about the legal implications of a breach of fiduciary duty in DC, consult with a dedicated contract attorney. Call right away to schedule a consultation for your case.
