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Fiduciary duty is the legal term for when one party must act on behalf of another. They are trusted with the oversight of property or funds. There are many fiduciary duty examples, including a lawyer and client, a trustee and a beneficiary, a corporate board member and a shareholder, or an elderly or incapacitated parent and a child (known as a principal and an agent).
A fiduciary duty is a duty of the highest order for one entity to another. The position of trust a relationship with fiduciary duty requires must be upheld, and any failure to fulfill your obligation can have severe consequences. As a result, it is essential to contact Heban, Murphree, and Lewandowski for legal assistance when a fiduciary duty breach may have occurred. If you need to know what can cause a breach in duty or what the fiduciary duty’s responsibilities are, read on.
The highest standard of care can exist in many different scenarios and contexts, but the general definition is a significant trust or confidence placed in one party by another. Whoever owes the fiduciary duty must use their knowledge or expertise to benefit the other party’s interest.
When a party does not fulfill their required obligations, it is a breach of fiduciary duty and can result in a civil lawsuit. This can happen in the case of a power of attorney when it is determined that the agent’s actions were not within the principal’s best interest.
To ensure there is no question of whether a duty was fulfilled, the agent should keep accurate records of all financial transactions done under the power of attorney. These records include receipts, copies of checks, tax forms, and all other documents that can be considered evidence of a transaction made under power of attorney.
Here is one example: a sibling is chosen as a power of attorney to watch over an incapacitated parent’s financial matters. Another child alleges that the sibling is spending their parent’s savings on their personal debts or in a manner that doesn’t benefit the parent. If there are no financial records kept explaining where funds have gone, this can be used against them in a civil case.
In this example, the agent may have acted in the principal’s best interest but has no records to attest to. The court may find that the agent breached their fiduciary duty and can be found liable for the financial transactions with no history. If this happens to a power of attorney that acted justly but failed to maintain accurate records, the results can be devastating.
First and foremost, acting swiftly is critical to proving your case for you and your loved one. Reaching out to a trusted law firm like Heban, Murphree, and Lewandowski can help revoke the power of attorney, demand financial compensation or return of stolen funds, and file a lawsuit. Abuse of power of attorney is a serious matter. Remember that if the principal is an elder and is not incapacitated, the agent must keep them informed of any issues that affect their interests. No secret profit or adverse claim may be made, and no property should be transferred to the agent from the principal unless specifically requested or indicated in the POA.
If a civil case indicates that the agent of fiduciary duty acted unlawfully or irresponsibly with assets or in any way contrary to the interest of the principal, damages may be rewarded. A return of any stolen property will immediately be returned to the principal, and the defendant may need to pay attorney fees for all parties as well as interest. Punitive damages can be assessed if fraud is determined or if the conduct is egregious.