In California, trustees are given different types of duties that they’re obligated to fulfill. These duties are to look out for the best interest of the grantor in various aspects, including financial responsibility. When the trustee does not fulfill their duty, it’s considered a breach.
Understanding a fiduciary relationship
A fiduciary relationship is created when a grantor places trust in a trustee with the trustee’s full knowledge. The trustee owes a duty of responsibility to the grantor. The trustee is considered a fiduciary. For example, an attorney is considered a fiduciary of their clients as they have a duty to act in the best interests of their clients under the law.
Fiduciary duties can be established via statutes of the law or through a contract. Statutes typically include things like board members having a fiduciary duty to represent the best interests of their shareholders. These are duties that are expected based on the law statutes. In cases where the law statutes do not implicate any sort of duty, it can be stated explicitly through a contract between the fiduciary and the other card.
What are breaches?
When a fiduciary acts in a way contrary to the best interest of their client, it’s considered a breach of their duty. Many of these actions are done out of the fiduciary’s own self-interest. In the event that a fiduciary breaches their duty, they can be sued by the other party. The other party may receive damages that they suffered due to the breach and they also may enjoy punitive damages if the judge decides.
Being a fiduciary comes along with legal duties. It’s important that you understand what your duties are so that you do not breach them. If you’ve experienced a breach in the fiduciary responsibilities owed to you, it’s a good idea to speak to a lawyer with experience in trust litigation about recovering damages.