You may have heard the term “fiduciary duty” before, but what exactly does it mean, and in what situations does it apply? Here is a rundown of the term as explained by a Florida Business Dispute Resolution Attorney at Savage, Combs & Villoch, PLLC. “Fiduciary” is a word derived from Latin, meaning “faith” or “trust,” and it refers to a high level of financial duty. In a fiduciary relationship, one person (the fiduciary) is responsible for the assets of another person and must act in the best interest of those assets. This usually applies when individuals handle the assets of others. This means that bookkeepers and other employees, as well as accountants and attorneys, are all considered fiduciaries.
Fiduciary duty is often used in situations involving business transactions and relationships such as homeowners associations. One example of an individual with fiduciary duties is a financial advisor, who is contracted by statute and through the business contract to keep your best interest in mind when it comes to your finances. If, for example, he learns about a profitable opportunity and does not share the information with you because his profits will be larger if he waits, he would be breaching his fiduciary duty. As a fiduciary, he must put his interests ahead of yours. Along those same lines, the board of directors in a corporation has a fiduciary responsibility to the corporation and their shareholders, and a community association board owes it to their residents to make the best budget decisions and assessments.
A fiduciary is obligated to:
- Make decisions in the interest of the person or entity they are responsible for.
- Oversee the handling of transactions involving the assets of the person they are responsible for.
- Avoid conflicts of interest.
- Take actions to enhance and protect the assets of that person or entity.
Fiduciary responsibility is given significant weight by law, so breaching this duty can result in severe consequences, including the potential for criminal charges, although most cases involve civil penalties with monetary damages. Punitive damages are also a possibility, particular in cases with intentional or malicious actions.
Take Action with a Florida Business Dispute Resolution Attorney
If you’ve been the victim of a fiduciary breach of duty, it’s important to take immediate action. In criminal matters, speak with appropriate authorities. If the violation was civil, contact a Florida business dispute resolution attorney. Call 813-200-0013 to speak with a Florida business dispute resolution attorney at Savage, Combs & Villoch, PLLC. and get the defense you deserve.