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What Is Fiduciary Duty and When Is It Breached?

What Is Fiduciary Duty and When Is It Breached?Fiduciary duty is a legal obligation requiring one party to act in the best interests of another. It’s considered the highest standard of care in law, and breaching it can cause significant harm. Attorneys at SBEMP (Slovak, Baron, Empey, Murphy & Pinkney) law firm provides professional legal advice and services to clients in Palm Springs, Palm Desert, Rancho Mirage, Inland Empire, Orange County, Coachella Valley, and surrounding communities.

Who Owes a Fiduciary Duty?

  • Business partners and corporate officers owe loyalty and care to their companies.

  • Trustees and executors manage estates and trusts responsibly.

  • Attorneys must act in their clients’ best interests.

  • Financial advisors and agents under power of attorney must protect client assets.

Types of Fiduciary Duties

  • Duty of loyalty: Avoiding conflicts of interest and self-dealing.

  • Duty of care: Making informed, prudent decisions.

  • Duty of good faith: Acting honestly and with integrity.

  • Duty of disclosure: Providing complete and accurate information.

Examples of Fiduciary Duty Breaches

  • A trustee misappropriates funds from a trust.

  • A corporate officer engages in self-dealing for personal profit.

  • An attorney fails to disclose conflicts of interest.

  • A financial advisor makes reckless investments for commissions.

Consequences of Breach

  • Financial harm to beneficiaries or shareholders.

  • Court-ordered monetary damages.

  • Removal of the fiduciary from their role.

  • Injunctions to stop harmful behavior.

Legal Remedies for Breach

Victims can pursue:

  • Compensation for losses

  • Removal or replacement of the fiduciary

  • Punitive damages in severe cases

  • Orders for restitution of misused funds

Preventing Fiduciary Breaches

  • Establish clear, written agreements.

  • Maintain transparency and accurate records.

  • Seek legal advice for complex decisions.

  • Implement oversight mechanisms in businesses and trusts.

FAQs About Fiduciary Duty

Is every business partner a fiduciary?
Yes—partners owe duties of loyalty and care to each other and the partnership.

What’s the difference between negligence and a breach of fiduciary duty?
Negligence is failing to act reasonably; breach involves violating trust obligations.

Can fiduciary breaches be criminal?
Yes—in cases involving fraud, embezzlement, or theft.

Contact Us

If you believe a fiduciary has failed to act in your best interests, legal action may be necessary. Our attorneys can evaluate your case and pursue remedies on your behalf. Contact us today to schedule your consultation.

Have any legal questions? Contact the Attorneys at SBEMP Law Firm:

For more information or to request a consultation please contact the law offices of SBEMP (Slovak, Baron, Empey, Murphy & Pinkney) by clicking here. 

SBEMP LLP is a full service law firm with attorney offices in Palm Springs (Palm Desert, Inland Empire, Rancho Mirage, Indian Wells), CA; Indian Wells, CA; Costa Mesa (Orange County), CA; San Diego, CA; New Jersey, NJ; and New York, NY.

DISCLAIMER: This blog post does not constitute legal advice, and no attorney-client relationship is formed by reading it. This blog post may be considered ATTORNEY ADVERTISING in some states. Prior results do not guarantee a similar outcome. Additional facts or future developments may affect subjects contained within this blog post. Before acting or relying upon any information within this newsletter, seek the advice of an attorney.

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